arnold & porter llp - sec · your reference, we have included an organizational chart...
TRANSCRIPT
Securities Act ot1933
Rule 902(b)
ARNOLD amp PORTER LLP Laura B Badian
LauraBadianapobullercom 2029426302
2029425999 Fax
555 Twelfth Street NW
Washington DC 20004-1206
February 24 2010
Mr Paul Dudek
Chief Office of International Corporate Finance
Securities and Exchange Commission
100 F Street NE
Washington DC 20549
USA
Re Application for Designation of CNSX Markets Inc
(CNSX Markets) as a Designated Offshore Securities Market
Dear Mr Dudek
I am writing on behalf of CNSX Markets Inc (formerly Canadian Trading and Quotation System Inc)
l to request that it be a designated offshore securities market for the ofpurposes
Regulation S (Regulation S) 2
promulgated under the Securities Act of 1933 as amended (the Securities Act)) This designation is being sought in order to assist market participants who
are eligible for the safe harbor provided by Rule 904 of Regulation S in satisfying the
requirements specified in that rule when reselling securities in on or through the facilities of
CNSX Markets
CNSX Markets is recognized by the Ontario Securities Commission (OSC) which is its
stockprimary regulator as a exchange subject to full OSC oversight As described more fully on
page 4 in the section on The CNSX Markets Market Structure CNSX Markets presently operates two separately branded markets the Canadian National Stock Exchange (CNSX) which is the listed market and Pure Trading a facility that trades securities of companies listed
on designated Canadian stock exchanges as per the recognition order of the OSC for CNSX
Markets Currently those stock exchanges are the Toronto Stock Exchange (TSX) and the
TSX Venture Exchange (TSX-V) which are also designated offshore securities markets For
1 The name change to CNSX Markets Inc was made solely for branding purposes and no other changes were
effected
2 17 CFR sect 230901 etseq
3 15 USC sect 77a-aa
Mr Paul Dudek
February 24 2010
Page 2
your reference we have included an organizational chart displaying the structure of CNSX
Markets attached as Exhibit A
The designation of CNSX Markets as a designated offshore securities market is of significance to
both CNSX Markets and the Canadian capital markets as a whole The origin of CNSX Markets
is based in part on the establishment by the Canadian Securities Administrators (CSA) 4
of a
framework for encouraging the development of competing marketplaces in Canada This
regulatory objective was reflected in the development of rules governing alternative trading systems (ATSs) but applies equally to the development of competing stock exchanges in a
market dominated by one incumbent stock exchange group (as described below) In describing the purpose of these rules (which serve a purpose similar to that of Regulation ATS) the CSA
stated
National Instrument 21-101 allows ATSs to withcompete traditional markets like exchanges Creating an environment that
allows for competition markets will give investors choicesamong We believe that such will stimulateallowing competition innovation and encourage markets to offer better features and
services to their members and subscribers at lower costs
National Instrument 21-101 also provides improved market
transparency for marketplaces so that all buyers and sellers of a
security have access to the best pricefor execution 5
The fact that CNSX Markets is not at present a designated offshore securities market places it
at a disadvantage to the Toronto Stock Exchange (TSX) the incumbent Canadian stock
exchange which was so designated when Regulation S was first adopted As a result of this
distinction since a seller on CNSX Markets Pure Trading facility under Rule 904 has an
affirmative obligation to determine that a buyer is not a US person (as opposed to the ability to
effect an open market transaction for the same security on the TSX provided the seller and its
agents do not knowingly sell to a US person) such trades on CNSX Markets are subject to
additional manual constraints on trading Traders therefore are motivated to bypass better priced orders on CNSX Markets Pure Trading facility and will instead effect such trades exclusively on
the TSX by virtue only of the designation by the Securities and Exchange Commission of the
TSX
4 The Canadian Securities Administrators is an umbrella organization through which the Canadian provincial
and territorial securities regulatory authorities coordinate securities regulation and formulate uniform rules and
policies 5
See Notice of National Instruments Companion Policies and Forms--Regulation of Marketplaces and Trading (2001) 24 OSCB (Supp) at p 100
Mr Paul Dudek
February 24 2010
Page 3
Since the characteristics of the buyer in Rule 904 trades on CNSX Markets constitute a special term of the trade better priced orders can be bypassed notwithstanding Canadian best price requirements resulting in a disadvantage to both buyers represented in CNSX Markets quotes and investors seeking to sell their securities on Canadian marketplaces in accordance with Rule
904
As part of the request that CNSX Markets be designated as a designated offshore securities
market CNSX Markets is requesting for greater certainty that both CNSX and Pure Trading be specifically named in that designation We believe that this request is consistent with prior SEC no-action letters such as Eurolist Market and the Altemext Market (available March 16 2007) Tokyo Stock Exchange Inc (available August 20 2004) and Stock Exchange of Hong Kong Ltd (available June 27 2000)
We submit that our application for designation is deserving on its merits furthers Canadian goals of fostering competing marketplaces and fosters investor protection by ensuring that investors
availing themselves of Rule 904 will receive the best available price in accordance with
Canadian trade-through protections
As discussed below CNSX Markets has the attributes specified in Rule 902(b)(2) of Regulation S
Background
CNSX Markets was recognized as a quotation and trade reporting system (QTRS) by the OSC
on February 28 2003 It was the first new equity marketplace to be recognized in Canada since
the implementation of National Instrument 21-101 -Marketplace Operation (NI 21-101)by the CSA
6 On May 7 2004 the OSC recognized CNSX Markets as a stock exchange instead of
a QTRS - a status similar to that of a national securities exchange in the United States In
accordance with the Canadian model for in reliance on the OSCsexchange oversight recognition order (which is attached as amended as Exhibit B) CNSX Markets is exempted from separate recognition as a stock exchange by the Alberta Securities Commission the British
Columbia Securities Commission and the Manitoba Securities Commission and is authorized with appropriate exemptions by the Qurbec Autoritbull des marchbulls financiers to carry on the
business of securities trading in Qurbec (these regulators being referred to collectively hereafter
as the Exempting Regulators) As no other provincial or territorial securities regulatory authority in Canada requires CNSX Markets to be recognized or exempt the foregoing allows
CNSX Markets to operate as a national stock exchange in Canada
NI 21-101 is available at httpswwwoscgovoncaRegulationRulemakingCurrentPart2rule_20080905_21-10 l_unofficial-consolidatedpdf
6
Mr Paul Dudek
February 24 2010
Page 4
-NI 21-101 together with National Instrument 23-101 Trading Rules establish the framework
within which all and ATSs must in thatexchanges operate Canada ensuring any marketplace operating in Canada meets standards designed to ensure fair and efficient markets CNSX
Markets is thus subject to the same regulatory framework and Commission oversight as the TSX
and the TSX-V 7
All of CNSX Markets public interest rules and policies are subject to OSC
approval following public notice and comment
CNSX Markets admits to trading on an unrestricted basis every dealer that meets the conditions
of admission (membership) provides equal access to services for each such dealer and has the
power to discipline dealers for breaches of applicable rules
The CNSX Markets Market Structure
CNSX Markets presently operates two markets the Canadian National Stock Exchange providing listing trading and market information services for small and medium-sized public companies and Pure Trading a facility that provides trading and market information services for
the securities of listedcompanies on designated Canadian stock exchanges (currently the TSX
and TSX-V which are also designated offshore securities markets) All operations are carried
out CNSX Markets and CNSX andthrough Inc Pure Trading are used for branding purposes to distinguish between the two different facilities Trading on Pure Trading (of securities listed on another exchange) occurs in a manner that is functionally the same as trading on US exchanges pursuant to unlisted trading privileges We note that the term markets is
used here generically as opposed to marketplaces which is the defined term in Canada for a
regulated exchange quotation and trade reporting system or ATS
For both markets investment dealers (Dealers) who must be Canadian registrants and
members in good standing of the Investment Industry Regulatory Organization of Canada
(IIROC) (the successor to the Investment Dealers Association of Canada and Market 8
Regulation Services Inc (RS) which is described later in this letter) must agree to be bound
by CNSX Markets rules (including the Universal Market Integrity Rules (UMIR) applicable to alltrading on Canadian marketplaces and CNSX Markets-specific trading rules) and to be
subject to CNSX Markets enforcement and disciplinary jurisdiction CNSX Markets refusemay to accept an applicant or accept an applicant subject to terms and conditions if it believes that
7 The TSX-V is the successor to CDNX which was formed by the merger of the Vancouver Stock Exchange
and the Alberta Stock Exchange (and later the Winnipeg Stock Exchange) and on this basis we understand it is
also a designated offshore securities market Both the TSX and TSX-V are wholly-owned subsidiaries of the TMX
Group Inc
8 On June 1 2008 RS merged with the Investment Dealers Association of Canada to form the Investment
Industry Regulatory Organization of Canada (IIROC) the Canadian member finn and marketplace self-regulatory organization IIROC performs a function similar to the Financial Industry Regulatory Authority (FINRA) and the
market regulation divisions of US stock exchanges
Mr Paul Dudek
February 24 2010
Page 5
the Dealer will not comply with CNSX Markets is not reason ofrequirements qualified by integrity solvency training or experience or it is otherwise not in the public interest to accept such Dealer Any Dealer who is refused or on limited terms andacceptance granted acceptance conditions will be provided with the reasons for the decision and has a right of appeal to the
CNSX Markets Board and then to the OSC However once they have been approved CNSX
Dealers must comply with all CNSX Markets requirements
A CNSX Dealer has access to both CNSX and Pure Trading IIROC administers the same
market regulation requirements for CNSX Markets to which the TSX and TSX-V are subject These market regulation requirements include market surveillance timely disclosure policy administration trade desk compliance and investigations and enforcement IIROC also monitors
and enforces compliance with the CNSX Markets Fair Prices rule CNSX Markets theperforms following additional regulatory functions not performed by IIROC assessing market maker
performance and monitoring ongoing compliance with CNSX Markets order entry rules
Both CNSX and Pure Trading are fully automated electronic central limit order books
(continuous auction markets) functionally similar to the TSX and TSX-V marketplaces Dealers
with access are able to enter orders to buy or sell securities Orders are in accordancequeued with priority rules (price and time) When a match is made a trade occurs and is confirmed to the
respective Dealers and to the Canadian Depository for Securities Limited (CDS) a recognized clearing agency for settlement CDS is the Canadian of The Trust ampequivalent Depository Clearing Corporation (DTCC) CNSX Markets complies with the pre-trade and post-trade transparency requirements set out in NI 21-101
CNSX
CNSX has its own entry-level listing standards (minimum working capital of at least $100000 active business minimum public distribution and integrity of principals) that allow the refusal of
companies whose financial condition capital structure or insiders give rise to market integrity concerns With respect to the minimum public distribution for CNSX-listed stocks CNSX has as a minimum requirement that at least 150 public holders own a total of at least 500000 freely tradable shares of the company on listing representing a minimum of 10 of the issued share
capital a requirement that is similar to that of other exchanges in Canada
CNSX-listed issuers are also to enhanced disclosuresubject ongoing requirements detailed
below
Enhanced Disclosure Model of Regulation for CNSX
CNSX-listed issuers are required to make extensive disclosures and are required to certify to
CNSX that such disclosures are true and complete CNSX listing rules govern material
transactions and the issuer is required to ensure it complies with CNSXs rules Fundamental
Mr Paul Dudek
February 24 2010
Page 6
changes (such as reverse takeovers) require advance approval 9
CNSX conducts periodic and ad
hoc reviews of a listed issuers disclosures to ensure compliance with its rules
Applications for listing on CNSX are supported by a listing statement (the Listing Statement) The Listing Statement includes prospectus-level disclosure including specified consolidated
financial information Managements Discussion and Analysis and audited and interim financial
statements It is reviewed by CNSXs listing team to ensure it is complete and that the company meets the minimum standards for Insiders oflistings applicants are required to complete Personal Information Forms disclosing such things as prior criminal offences regulatory enforcement actions and bankruptcy proceedings and are subject to the same background investigations that are performed for companies listed on the TSX and TSX-V
To be listed on CNSX an issuer must be a reporting issuer or the equivalent in a jurisdiction in
Canada All CNSX-listed issuers are automatically reporting issuers in Ontario because CNSX
Markets is a recognized exchange and may also be a reporting issuer in one or more other
provinces
Reporting issuers are required by Canadian securities laws to file unaudited interim financial
statements every quarter annual audited financial statements and an Annual Information Form
(which is the basic annual of all Canadian Allreport required reporting issuers) statutory continuous disclosure documents are required to be posted in The System for Electronic
Document Analysis and Retrieval (SEDAR) and CNSX provides links to SEDAR as part of its
Listing Disclosure Hall on the CNSX website at wwwCNSXca (the Website)
CNSX-listed issuers are required to disclose information over and above that mandated by applicable securities laws (see below) and must post and update that information on the Website a central repository of issuer and trading information for investors These disclosure obligations are comparable to (and in many instances higher than) those for issuers on the TSX or TSX-V
As noted above in order to qualify for listing CNSX Markets issuers prepare and post the
Listing Statement The Listing Statement itself must be updated annually and refiled just like an
Annual Information Form To continue to qualify for listing every CNSX issuer must post press releases to disclose all material information along with notices of corporate transactions (similar to the documentation provided to the TSX and TSX-V by their listedissuers which is considered
public but which is not as easily available for viewing)
To maintain its listing CNSX requires a listed issuer to file a Monthly Progress Report (MPR) and a quarterly update to the Listing Statement (see Form 7 and Form 5 respectively attached as
Exhibit C) The MPR must be posted before the opening of trading on the fifth trading day of
each month The MPR is not intended to replace the issuers obligation to separately report material information forthwith upon the information becoming known to management or to post
Policy 8 of the CNSX Markets Issuer Policies 9
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
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securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
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February 24 2010
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CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
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February 24 2010
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TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
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February 24 2010
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Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
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Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
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February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 2
your reference we have included an organizational chart displaying the structure of CNSX
Markets attached as Exhibit A
The designation of CNSX Markets as a designated offshore securities market is of significance to
both CNSX Markets and the Canadian capital markets as a whole The origin of CNSX Markets
is based in part on the establishment by the Canadian Securities Administrators (CSA) 4
of a
framework for encouraging the development of competing marketplaces in Canada This
regulatory objective was reflected in the development of rules governing alternative trading systems (ATSs) but applies equally to the development of competing stock exchanges in a
market dominated by one incumbent stock exchange group (as described below) In describing the purpose of these rules (which serve a purpose similar to that of Regulation ATS) the CSA
stated
National Instrument 21-101 allows ATSs to withcompete traditional markets like exchanges Creating an environment that
allows for competition markets will give investors choicesamong We believe that such will stimulateallowing competition innovation and encourage markets to offer better features and
services to their members and subscribers at lower costs
National Instrument 21-101 also provides improved market
transparency for marketplaces so that all buyers and sellers of a
security have access to the best pricefor execution 5
The fact that CNSX Markets is not at present a designated offshore securities market places it
at a disadvantage to the Toronto Stock Exchange (TSX) the incumbent Canadian stock
exchange which was so designated when Regulation S was first adopted As a result of this
distinction since a seller on CNSX Markets Pure Trading facility under Rule 904 has an
affirmative obligation to determine that a buyer is not a US person (as opposed to the ability to
effect an open market transaction for the same security on the TSX provided the seller and its
agents do not knowingly sell to a US person) such trades on CNSX Markets are subject to
additional manual constraints on trading Traders therefore are motivated to bypass better priced orders on CNSX Markets Pure Trading facility and will instead effect such trades exclusively on
the TSX by virtue only of the designation by the Securities and Exchange Commission of the
TSX
4 The Canadian Securities Administrators is an umbrella organization through which the Canadian provincial
and territorial securities regulatory authorities coordinate securities regulation and formulate uniform rules and
policies 5
See Notice of National Instruments Companion Policies and Forms--Regulation of Marketplaces and Trading (2001) 24 OSCB (Supp) at p 100
Mr Paul Dudek
February 24 2010
Page 3
Since the characteristics of the buyer in Rule 904 trades on CNSX Markets constitute a special term of the trade better priced orders can be bypassed notwithstanding Canadian best price requirements resulting in a disadvantage to both buyers represented in CNSX Markets quotes and investors seeking to sell their securities on Canadian marketplaces in accordance with Rule
904
As part of the request that CNSX Markets be designated as a designated offshore securities
market CNSX Markets is requesting for greater certainty that both CNSX and Pure Trading be specifically named in that designation We believe that this request is consistent with prior SEC no-action letters such as Eurolist Market and the Altemext Market (available March 16 2007) Tokyo Stock Exchange Inc (available August 20 2004) and Stock Exchange of Hong Kong Ltd (available June 27 2000)
We submit that our application for designation is deserving on its merits furthers Canadian goals of fostering competing marketplaces and fosters investor protection by ensuring that investors
availing themselves of Rule 904 will receive the best available price in accordance with
Canadian trade-through protections
As discussed below CNSX Markets has the attributes specified in Rule 902(b)(2) of Regulation S
Background
CNSX Markets was recognized as a quotation and trade reporting system (QTRS) by the OSC
on February 28 2003 It was the first new equity marketplace to be recognized in Canada since
the implementation of National Instrument 21-101 -Marketplace Operation (NI 21-101)by the CSA
6 On May 7 2004 the OSC recognized CNSX Markets as a stock exchange instead of
a QTRS - a status similar to that of a national securities exchange in the United States In
accordance with the Canadian model for in reliance on the OSCsexchange oversight recognition order (which is attached as amended as Exhibit B) CNSX Markets is exempted from separate recognition as a stock exchange by the Alberta Securities Commission the British
Columbia Securities Commission and the Manitoba Securities Commission and is authorized with appropriate exemptions by the Qurbec Autoritbull des marchbulls financiers to carry on the
business of securities trading in Qurbec (these regulators being referred to collectively hereafter
as the Exempting Regulators) As no other provincial or territorial securities regulatory authority in Canada requires CNSX Markets to be recognized or exempt the foregoing allows
CNSX Markets to operate as a national stock exchange in Canada
NI 21-101 is available at httpswwwoscgovoncaRegulationRulemakingCurrentPart2rule_20080905_21-10 l_unofficial-consolidatedpdf
6
Mr Paul Dudek
February 24 2010
Page 4
-NI 21-101 together with National Instrument 23-101 Trading Rules establish the framework
within which all and ATSs must in thatexchanges operate Canada ensuring any marketplace operating in Canada meets standards designed to ensure fair and efficient markets CNSX
Markets is thus subject to the same regulatory framework and Commission oversight as the TSX
and the TSX-V 7
All of CNSX Markets public interest rules and policies are subject to OSC
approval following public notice and comment
CNSX Markets admits to trading on an unrestricted basis every dealer that meets the conditions
of admission (membership) provides equal access to services for each such dealer and has the
power to discipline dealers for breaches of applicable rules
The CNSX Markets Market Structure
CNSX Markets presently operates two markets the Canadian National Stock Exchange providing listing trading and market information services for small and medium-sized public companies and Pure Trading a facility that provides trading and market information services for
the securities of listedcompanies on designated Canadian stock exchanges (currently the TSX
and TSX-V which are also designated offshore securities markets) All operations are carried
out CNSX Markets and CNSX andthrough Inc Pure Trading are used for branding purposes to distinguish between the two different facilities Trading on Pure Trading (of securities listed on another exchange) occurs in a manner that is functionally the same as trading on US exchanges pursuant to unlisted trading privileges We note that the term markets is
used here generically as opposed to marketplaces which is the defined term in Canada for a
regulated exchange quotation and trade reporting system or ATS
For both markets investment dealers (Dealers) who must be Canadian registrants and
members in good standing of the Investment Industry Regulatory Organization of Canada
(IIROC) (the successor to the Investment Dealers Association of Canada and Market 8
Regulation Services Inc (RS) which is described later in this letter) must agree to be bound
by CNSX Markets rules (including the Universal Market Integrity Rules (UMIR) applicable to alltrading on Canadian marketplaces and CNSX Markets-specific trading rules) and to be
subject to CNSX Markets enforcement and disciplinary jurisdiction CNSX Markets refusemay to accept an applicant or accept an applicant subject to terms and conditions if it believes that
7 The TSX-V is the successor to CDNX which was formed by the merger of the Vancouver Stock Exchange
and the Alberta Stock Exchange (and later the Winnipeg Stock Exchange) and on this basis we understand it is
also a designated offshore securities market Both the TSX and TSX-V are wholly-owned subsidiaries of the TMX
Group Inc
8 On June 1 2008 RS merged with the Investment Dealers Association of Canada to form the Investment
Industry Regulatory Organization of Canada (IIROC) the Canadian member finn and marketplace self-regulatory organization IIROC performs a function similar to the Financial Industry Regulatory Authority (FINRA) and the
market regulation divisions of US stock exchanges
Mr Paul Dudek
February 24 2010
Page 5
the Dealer will not comply with CNSX Markets is not reason ofrequirements qualified by integrity solvency training or experience or it is otherwise not in the public interest to accept such Dealer Any Dealer who is refused or on limited terms andacceptance granted acceptance conditions will be provided with the reasons for the decision and has a right of appeal to the
CNSX Markets Board and then to the OSC However once they have been approved CNSX
Dealers must comply with all CNSX Markets requirements
A CNSX Dealer has access to both CNSX and Pure Trading IIROC administers the same
market regulation requirements for CNSX Markets to which the TSX and TSX-V are subject These market regulation requirements include market surveillance timely disclosure policy administration trade desk compliance and investigations and enforcement IIROC also monitors
and enforces compliance with the CNSX Markets Fair Prices rule CNSX Markets theperforms following additional regulatory functions not performed by IIROC assessing market maker
performance and monitoring ongoing compliance with CNSX Markets order entry rules
Both CNSX and Pure Trading are fully automated electronic central limit order books
(continuous auction markets) functionally similar to the TSX and TSX-V marketplaces Dealers
with access are able to enter orders to buy or sell securities Orders are in accordancequeued with priority rules (price and time) When a match is made a trade occurs and is confirmed to the
respective Dealers and to the Canadian Depository for Securities Limited (CDS) a recognized clearing agency for settlement CDS is the Canadian of The Trust ampequivalent Depository Clearing Corporation (DTCC) CNSX Markets complies with the pre-trade and post-trade transparency requirements set out in NI 21-101
CNSX
CNSX has its own entry-level listing standards (minimum working capital of at least $100000 active business minimum public distribution and integrity of principals) that allow the refusal of
companies whose financial condition capital structure or insiders give rise to market integrity concerns With respect to the minimum public distribution for CNSX-listed stocks CNSX has as a minimum requirement that at least 150 public holders own a total of at least 500000 freely tradable shares of the company on listing representing a minimum of 10 of the issued share
capital a requirement that is similar to that of other exchanges in Canada
CNSX-listed issuers are also to enhanced disclosuresubject ongoing requirements detailed
below
Enhanced Disclosure Model of Regulation for CNSX
CNSX-listed issuers are required to make extensive disclosures and are required to certify to
CNSX that such disclosures are true and complete CNSX listing rules govern material
transactions and the issuer is required to ensure it complies with CNSXs rules Fundamental
Mr Paul Dudek
February 24 2010
Page 6
changes (such as reverse takeovers) require advance approval 9
CNSX conducts periodic and ad
hoc reviews of a listed issuers disclosures to ensure compliance with its rules
Applications for listing on CNSX are supported by a listing statement (the Listing Statement) The Listing Statement includes prospectus-level disclosure including specified consolidated
financial information Managements Discussion and Analysis and audited and interim financial
statements It is reviewed by CNSXs listing team to ensure it is complete and that the company meets the minimum standards for Insiders oflistings applicants are required to complete Personal Information Forms disclosing such things as prior criminal offences regulatory enforcement actions and bankruptcy proceedings and are subject to the same background investigations that are performed for companies listed on the TSX and TSX-V
To be listed on CNSX an issuer must be a reporting issuer or the equivalent in a jurisdiction in
Canada All CNSX-listed issuers are automatically reporting issuers in Ontario because CNSX
Markets is a recognized exchange and may also be a reporting issuer in one or more other
provinces
Reporting issuers are required by Canadian securities laws to file unaudited interim financial
statements every quarter annual audited financial statements and an Annual Information Form
(which is the basic annual of all Canadian Allreport required reporting issuers) statutory continuous disclosure documents are required to be posted in The System for Electronic
Document Analysis and Retrieval (SEDAR) and CNSX provides links to SEDAR as part of its
Listing Disclosure Hall on the CNSX website at wwwCNSXca (the Website)
CNSX-listed issuers are required to disclose information over and above that mandated by applicable securities laws (see below) and must post and update that information on the Website a central repository of issuer and trading information for investors These disclosure obligations are comparable to (and in many instances higher than) those for issuers on the TSX or TSX-V
As noted above in order to qualify for listing CNSX Markets issuers prepare and post the
Listing Statement The Listing Statement itself must be updated annually and refiled just like an
Annual Information Form To continue to qualify for listing every CNSX issuer must post press releases to disclose all material information along with notices of corporate transactions (similar to the documentation provided to the TSX and TSX-V by their listedissuers which is considered
public but which is not as easily available for viewing)
To maintain its listing CNSX requires a listed issuer to file a Monthly Progress Report (MPR) and a quarterly update to the Listing Statement (see Form 7 and Form 5 respectively attached as
Exhibit C) The MPR must be posted before the opening of trading on the fifth trading day of
each month The MPR is not intended to replace the issuers obligation to separately report material information forthwith upon the information becoming known to management or to post
Policy 8 of the CNSX Markets Issuer Policies 9
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 3
Since the characteristics of the buyer in Rule 904 trades on CNSX Markets constitute a special term of the trade better priced orders can be bypassed notwithstanding Canadian best price requirements resulting in a disadvantage to both buyers represented in CNSX Markets quotes and investors seeking to sell their securities on Canadian marketplaces in accordance with Rule
904
As part of the request that CNSX Markets be designated as a designated offshore securities
market CNSX Markets is requesting for greater certainty that both CNSX and Pure Trading be specifically named in that designation We believe that this request is consistent with prior SEC no-action letters such as Eurolist Market and the Altemext Market (available March 16 2007) Tokyo Stock Exchange Inc (available August 20 2004) and Stock Exchange of Hong Kong Ltd (available June 27 2000)
We submit that our application for designation is deserving on its merits furthers Canadian goals of fostering competing marketplaces and fosters investor protection by ensuring that investors
availing themselves of Rule 904 will receive the best available price in accordance with
Canadian trade-through protections
As discussed below CNSX Markets has the attributes specified in Rule 902(b)(2) of Regulation S
Background
CNSX Markets was recognized as a quotation and trade reporting system (QTRS) by the OSC
on February 28 2003 It was the first new equity marketplace to be recognized in Canada since
the implementation of National Instrument 21-101 -Marketplace Operation (NI 21-101)by the CSA
6 On May 7 2004 the OSC recognized CNSX Markets as a stock exchange instead of
a QTRS - a status similar to that of a national securities exchange in the United States In
accordance with the Canadian model for in reliance on the OSCsexchange oversight recognition order (which is attached as amended as Exhibit B) CNSX Markets is exempted from separate recognition as a stock exchange by the Alberta Securities Commission the British
Columbia Securities Commission and the Manitoba Securities Commission and is authorized with appropriate exemptions by the Qurbec Autoritbull des marchbulls financiers to carry on the
business of securities trading in Qurbec (these regulators being referred to collectively hereafter
as the Exempting Regulators) As no other provincial or territorial securities regulatory authority in Canada requires CNSX Markets to be recognized or exempt the foregoing allows
CNSX Markets to operate as a national stock exchange in Canada
NI 21-101 is available at httpswwwoscgovoncaRegulationRulemakingCurrentPart2rule_20080905_21-10 l_unofficial-consolidatedpdf
6
Mr Paul Dudek
February 24 2010
Page 4
-NI 21-101 together with National Instrument 23-101 Trading Rules establish the framework
within which all and ATSs must in thatexchanges operate Canada ensuring any marketplace operating in Canada meets standards designed to ensure fair and efficient markets CNSX
Markets is thus subject to the same regulatory framework and Commission oversight as the TSX
and the TSX-V 7
All of CNSX Markets public interest rules and policies are subject to OSC
approval following public notice and comment
CNSX Markets admits to trading on an unrestricted basis every dealer that meets the conditions
of admission (membership) provides equal access to services for each such dealer and has the
power to discipline dealers for breaches of applicable rules
The CNSX Markets Market Structure
CNSX Markets presently operates two markets the Canadian National Stock Exchange providing listing trading and market information services for small and medium-sized public companies and Pure Trading a facility that provides trading and market information services for
the securities of listedcompanies on designated Canadian stock exchanges (currently the TSX
and TSX-V which are also designated offshore securities markets) All operations are carried
out CNSX Markets and CNSX andthrough Inc Pure Trading are used for branding purposes to distinguish between the two different facilities Trading on Pure Trading (of securities listed on another exchange) occurs in a manner that is functionally the same as trading on US exchanges pursuant to unlisted trading privileges We note that the term markets is
used here generically as opposed to marketplaces which is the defined term in Canada for a
regulated exchange quotation and trade reporting system or ATS
For both markets investment dealers (Dealers) who must be Canadian registrants and
members in good standing of the Investment Industry Regulatory Organization of Canada
(IIROC) (the successor to the Investment Dealers Association of Canada and Market 8
Regulation Services Inc (RS) which is described later in this letter) must agree to be bound
by CNSX Markets rules (including the Universal Market Integrity Rules (UMIR) applicable to alltrading on Canadian marketplaces and CNSX Markets-specific trading rules) and to be
subject to CNSX Markets enforcement and disciplinary jurisdiction CNSX Markets refusemay to accept an applicant or accept an applicant subject to terms and conditions if it believes that
7 The TSX-V is the successor to CDNX which was formed by the merger of the Vancouver Stock Exchange
and the Alberta Stock Exchange (and later the Winnipeg Stock Exchange) and on this basis we understand it is
also a designated offshore securities market Both the TSX and TSX-V are wholly-owned subsidiaries of the TMX
Group Inc
8 On June 1 2008 RS merged with the Investment Dealers Association of Canada to form the Investment
Industry Regulatory Organization of Canada (IIROC) the Canadian member finn and marketplace self-regulatory organization IIROC performs a function similar to the Financial Industry Regulatory Authority (FINRA) and the
market regulation divisions of US stock exchanges
Mr Paul Dudek
February 24 2010
Page 5
the Dealer will not comply with CNSX Markets is not reason ofrequirements qualified by integrity solvency training or experience or it is otherwise not in the public interest to accept such Dealer Any Dealer who is refused or on limited terms andacceptance granted acceptance conditions will be provided with the reasons for the decision and has a right of appeal to the
CNSX Markets Board and then to the OSC However once they have been approved CNSX
Dealers must comply with all CNSX Markets requirements
A CNSX Dealer has access to both CNSX and Pure Trading IIROC administers the same
market regulation requirements for CNSX Markets to which the TSX and TSX-V are subject These market regulation requirements include market surveillance timely disclosure policy administration trade desk compliance and investigations and enforcement IIROC also monitors
and enforces compliance with the CNSX Markets Fair Prices rule CNSX Markets theperforms following additional regulatory functions not performed by IIROC assessing market maker
performance and monitoring ongoing compliance with CNSX Markets order entry rules
Both CNSX and Pure Trading are fully automated electronic central limit order books
(continuous auction markets) functionally similar to the TSX and TSX-V marketplaces Dealers
with access are able to enter orders to buy or sell securities Orders are in accordancequeued with priority rules (price and time) When a match is made a trade occurs and is confirmed to the
respective Dealers and to the Canadian Depository for Securities Limited (CDS) a recognized clearing agency for settlement CDS is the Canadian of The Trust ampequivalent Depository Clearing Corporation (DTCC) CNSX Markets complies with the pre-trade and post-trade transparency requirements set out in NI 21-101
CNSX
CNSX has its own entry-level listing standards (minimum working capital of at least $100000 active business minimum public distribution and integrity of principals) that allow the refusal of
companies whose financial condition capital structure or insiders give rise to market integrity concerns With respect to the minimum public distribution for CNSX-listed stocks CNSX has as a minimum requirement that at least 150 public holders own a total of at least 500000 freely tradable shares of the company on listing representing a minimum of 10 of the issued share
capital a requirement that is similar to that of other exchanges in Canada
CNSX-listed issuers are also to enhanced disclosuresubject ongoing requirements detailed
below
Enhanced Disclosure Model of Regulation for CNSX
CNSX-listed issuers are required to make extensive disclosures and are required to certify to
CNSX that such disclosures are true and complete CNSX listing rules govern material
transactions and the issuer is required to ensure it complies with CNSXs rules Fundamental
Mr Paul Dudek
February 24 2010
Page 6
changes (such as reverse takeovers) require advance approval 9
CNSX conducts periodic and ad
hoc reviews of a listed issuers disclosures to ensure compliance with its rules
Applications for listing on CNSX are supported by a listing statement (the Listing Statement) The Listing Statement includes prospectus-level disclosure including specified consolidated
financial information Managements Discussion and Analysis and audited and interim financial
statements It is reviewed by CNSXs listing team to ensure it is complete and that the company meets the minimum standards for Insiders oflistings applicants are required to complete Personal Information Forms disclosing such things as prior criminal offences regulatory enforcement actions and bankruptcy proceedings and are subject to the same background investigations that are performed for companies listed on the TSX and TSX-V
To be listed on CNSX an issuer must be a reporting issuer or the equivalent in a jurisdiction in
Canada All CNSX-listed issuers are automatically reporting issuers in Ontario because CNSX
Markets is a recognized exchange and may also be a reporting issuer in one or more other
provinces
Reporting issuers are required by Canadian securities laws to file unaudited interim financial
statements every quarter annual audited financial statements and an Annual Information Form
(which is the basic annual of all Canadian Allreport required reporting issuers) statutory continuous disclosure documents are required to be posted in The System for Electronic
Document Analysis and Retrieval (SEDAR) and CNSX provides links to SEDAR as part of its
Listing Disclosure Hall on the CNSX website at wwwCNSXca (the Website)
CNSX-listed issuers are required to disclose information over and above that mandated by applicable securities laws (see below) and must post and update that information on the Website a central repository of issuer and trading information for investors These disclosure obligations are comparable to (and in many instances higher than) those for issuers on the TSX or TSX-V
As noted above in order to qualify for listing CNSX Markets issuers prepare and post the
Listing Statement The Listing Statement itself must be updated annually and refiled just like an
Annual Information Form To continue to qualify for listing every CNSX issuer must post press releases to disclose all material information along with notices of corporate transactions (similar to the documentation provided to the TSX and TSX-V by their listedissuers which is considered
public but which is not as easily available for viewing)
To maintain its listing CNSX requires a listed issuer to file a Monthly Progress Report (MPR) and a quarterly update to the Listing Statement (see Form 7 and Form 5 respectively attached as
Exhibit C) The MPR must be posted before the opening of trading on the fifth trading day of
each month The MPR is not intended to replace the issuers obligation to separately report material information forthwith upon the information becoming known to management or to post
Policy 8 of the CNSX Markets Issuer Policies 9
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 4
-NI 21-101 together with National Instrument 23-101 Trading Rules establish the framework
within which all and ATSs must in thatexchanges operate Canada ensuring any marketplace operating in Canada meets standards designed to ensure fair and efficient markets CNSX
Markets is thus subject to the same regulatory framework and Commission oversight as the TSX
and the TSX-V 7
All of CNSX Markets public interest rules and policies are subject to OSC
approval following public notice and comment
CNSX Markets admits to trading on an unrestricted basis every dealer that meets the conditions
of admission (membership) provides equal access to services for each such dealer and has the
power to discipline dealers for breaches of applicable rules
The CNSX Markets Market Structure
CNSX Markets presently operates two markets the Canadian National Stock Exchange providing listing trading and market information services for small and medium-sized public companies and Pure Trading a facility that provides trading and market information services for
the securities of listedcompanies on designated Canadian stock exchanges (currently the TSX
and TSX-V which are also designated offshore securities markets) All operations are carried
out CNSX Markets and CNSX andthrough Inc Pure Trading are used for branding purposes to distinguish between the two different facilities Trading on Pure Trading (of securities listed on another exchange) occurs in a manner that is functionally the same as trading on US exchanges pursuant to unlisted trading privileges We note that the term markets is
used here generically as opposed to marketplaces which is the defined term in Canada for a
regulated exchange quotation and trade reporting system or ATS
For both markets investment dealers (Dealers) who must be Canadian registrants and
members in good standing of the Investment Industry Regulatory Organization of Canada
(IIROC) (the successor to the Investment Dealers Association of Canada and Market 8
Regulation Services Inc (RS) which is described later in this letter) must agree to be bound
by CNSX Markets rules (including the Universal Market Integrity Rules (UMIR) applicable to alltrading on Canadian marketplaces and CNSX Markets-specific trading rules) and to be
subject to CNSX Markets enforcement and disciplinary jurisdiction CNSX Markets refusemay to accept an applicant or accept an applicant subject to terms and conditions if it believes that
7 The TSX-V is the successor to CDNX which was formed by the merger of the Vancouver Stock Exchange
and the Alberta Stock Exchange (and later the Winnipeg Stock Exchange) and on this basis we understand it is
also a designated offshore securities market Both the TSX and TSX-V are wholly-owned subsidiaries of the TMX
Group Inc
8 On June 1 2008 RS merged with the Investment Dealers Association of Canada to form the Investment
Industry Regulatory Organization of Canada (IIROC) the Canadian member finn and marketplace self-regulatory organization IIROC performs a function similar to the Financial Industry Regulatory Authority (FINRA) and the
market regulation divisions of US stock exchanges
Mr Paul Dudek
February 24 2010
Page 5
the Dealer will not comply with CNSX Markets is not reason ofrequirements qualified by integrity solvency training or experience or it is otherwise not in the public interest to accept such Dealer Any Dealer who is refused or on limited terms andacceptance granted acceptance conditions will be provided with the reasons for the decision and has a right of appeal to the
CNSX Markets Board and then to the OSC However once they have been approved CNSX
Dealers must comply with all CNSX Markets requirements
A CNSX Dealer has access to both CNSX and Pure Trading IIROC administers the same
market regulation requirements for CNSX Markets to which the TSX and TSX-V are subject These market regulation requirements include market surveillance timely disclosure policy administration trade desk compliance and investigations and enforcement IIROC also monitors
and enforces compliance with the CNSX Markets Fair Prices rule CNSX Markets theperforms following additional regulatory functions not performed by IIROC assessing market maker
performance and monitoring ongoing compliance with CNSX Markets order entry rules
Both CNSX and Pure Trading are fully automated electronic central limit order books
(continuous auction markets) functionally similar to the TSX and TSX-V marketplaces Dealers
with access are able to enter orders to buy or sell securities Orders are in accordancequeued with priority rules (price and time) When a match is made a trade occurs and is confirmed to the
respective Dealers and to the Canadian Depository for Securities Limited (CDS) a recognized clearing agency for settlement CDS is the Canadian of The Trust ampequivalent Depository Clearing Corporation (DTCC) CNSX Markets complies with the pre-trade and post-trade transparency requirements set out in NI 21-101
CNSX
CNSX has its own entry-level listing standards (minimum working capital of at least $100000 active business minimum public distribution and integrity of principals) that allow the refusal of
companies whose financial condition capital structure or insiders give rise to market integrity concerns With respect to the minimum public distribution for CNSX-listed stocks CNSX has as a minimum requirement that at least 150 public holders own a total of at least 500000 freely tradable shares of the company on listing representing a minimum of 10 of the issued share
capital a requirement that is similar to that of other exchanges in Canada
CNSX-listed issuers are also to enhanced disclosuresubject ongoing requirements detailed
below
Enhanced Disclosure Model of Regulation for CNSX
CNSX-listed issuers are required to make extensive disclosures and are required to certify to
CNSX that such disclosures are true and complete CNSX listing rules govern material
transactions and the issuer is required to ensure it complies with CNSXs rules Fundamental
Mr Paul Dudek
February 24 2010
Page 6
changes (such as reverse takeovers) require advance approval 9
CNSX conducts periodic and ad
hoc reviews of a listed issuers disclosures to ensure compliance with its rules
Applications for listing on CNSX are supported by a listing statement (the Listing Statement) The Listing Statement includes prospectus-level disclosure including specified consolidated
financial information Managements Discussion and Analysis and audited and interim financial
statements It is reviewed by CNSXs listing team to ensure it is complete and that the company meets the minimum standards for Insiders oflistings applicants are required to complete Personal Information Forms disclosing such things as prior criminal offences regulatory enforcement actions and bankruptcy proceedings and are subject to the same background investigations that are performed for companies listed on the TSX and TSX-V
To be listed on CNSX an issuer must be a reporting issuer or the equivalent in a jurisdiction in
Canada All CNSX-listed issuers are automatically reporting issuers in Ontario because CNSX
Markets is a recognized exchange and may also be a reporting issuer in one or more other
provinces
Reporting issuers are required by Canadian securities laws to file unaudited interim financial
statements every quarter annual audited financial statements and an Annual Information Form
(which is the basic annual of all Canadian Allreport required reporting issuers) statutory continuous disclosure documents are required to be posted in The System for Electronic
Document Analysis and Retrieval (SEDAR) and CNSX provides links to SEDAR as part of its
Listing Disclosure Hall on the CNSX website at wwwCNSXca (the Website)
CNSX-listed issuers are required to disclose information over and above that mandated by applicable securities laws (see below) and must post and update that information on the Website a central repository of issuer and trading information for investors These disclosure obligations are comparable to (and in many instances higher than) those for issuers on the TSX or TSX-V
As noted above in order to qualify for listing CNSX Markets issuers prepare and post the
Listing Statement The Listing Statement itself must be updated annually and refiled just like an
Annual Information Form To continue to qualify for listing every CNSX issuer must post press releases to disclose all material information along with notices of corporate transactions (similar to the documentation provided to the TSX and TSX-V by their listedissuers which is considered
public but which is not as easily available for viewing)
To maintain its listing CNSX requires a listed issuer to file a Monthly Progress Report (MPR) and a quarterly update to the Listing Statement (see Form 7 and Form 5 respectively attached as
Exhibit C) The MPR must be posted before the opening of trading on the fifth trading day of
each month The MPR is not intended to replace the issuers obligation to separately report material information forthwith upon the information becoming known to management or to post
Policy 8 of the CNSX Markets Issuer Policies 9
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
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Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 5
the Dealer will not comply with CNSX Markets is not reason ofrequirements qualified by integrity solvency training or experience or it is otherwise not in the public interest to accept such Dealer Any Dealer who is refused or on limited terms andacceptance granted acceptance conditions will be provided with the reasons for the decision and has a right of appeal to the
CNSX Markets Board and then to the OSC However once they have been approved CNSX
Dealers must comply with all CNSX Markets requirements
A CNSX Dealer has access to both CNSX and Pure Trading IIROC administers the same
market regulation requirements for CNSX Markets to which the TSX and TSX-V are subject These market regulation requirements include market surveillance timely disclosure policy administration trade desk compliance and investigations and enforcement IIROC also monitors
and enforces compliance with the CNSX Markets Fair Prices rule CNSX Markets theperforms following additional regulatory functions not performed by IIROC assessing market maker
performance and monitoring ongoing compliance with CNSX Markets order entry rules
Both CNSX and Pure Trading are fully automated electronic central limit order books
(continuous auction markets) functionally similar to the TSX and TSX-V marketplaces Dealers
with access are able to enter orders to buy or sell securities Orders are in accordancequeued with priority rules (price and time) When a match is made a trade occurs and is confirmed to the
respective Dealers and to the Canadian Depository for Securities Limited (CDS) a recognized clearing agency for settlement CDS is the Canadian of The Trust ampequivalent Depository Clearing Corporation (DTCC) CNSX Markets complies with the pre-trade and post-trade transparency requirements set out in NI 21-101
CNSX
CNSX has its own entry-level listing standards (minimum working capital of at least $100000 active business minimum public distribution and integrity of principals) that allow the refusal of
companies whose financial condition capital structure or insiders give rise to market integrity concerns With respect to the minimum public distribution for CNSX-listed stocks CNSX has as a minimum requirement that at least 150 public holders own a total of at least 500000 freely tradable shares of the company on listing representing a minimum of 10 of the issued share
capital a requirement that is similar to that of other exchanges in Canada
CNSX-listed issuers are also to enhanced disclosuresubject ongoing requirements detailed
below
Enhanced Disclosure Model of Regulation for CNSX
CNSX-listed issuers are required to make extensive disclosures and are required to certify to
CNSX that such disclosures are true and complete CNSX listing rules govern material
transactions and the issuer is required to ensure it complies with CNSXs rules Fundamental
Mr Paul Dudek
February 24 2010
Page 6
changes (such as reverse takeovers) require advance approval 9
CNSX conducts periodic and ad
hoc reviews of a listed issuers disclosures to ensure compliance with its rules
Applications for listing on CNSX are supported by a listing statement (the Listing Statement) The Listing Statement includes prospectus-level disclosure including specified consolidated
financial information Managements Discussion and Analysis and audited and interim financial
statements It is reviewed by CNSXs listing team to ensure it is complete and that the company meets the minimum standards for Insiders oflistings applicants are required to complete Personal Information Forms disclosing such things as prior criminal offences regulatory enforcement actions and bankruptcy proceedings and are subject to the same background investigations that are performed for companies listed on the TSX and TSX-V
To be listed on CNSX an issuer must be a reporting issuer or the equivalent in a jurisdiction in
Canada All CNSX-listed issuers are automatically reporting issuers in Ontario because CNSX
Markets is a recognized exchange and may also be a reporting issuer in one or more other
provinces
Reporting issuers are required by Canadian securities laws to file unaudited interim financial
statements every quarter annual audited financial statements and an Annual Information Form
(which is the basic annual of all Canadian Allreport required reporting issuers) statutory continuous disclosure documents are required to be posted in The System for Electronic
Document Analysis and Retrieval (SEDAR) and CNSX provides links to SEDAR as part of its
Listing Disclosure Hall on the CNSX website at wwwCNSXca (the Website)
CNSX-listed issuers are required to disclose information over and above that mandated by applicable securities laws (see below) and must post and update that information on the Website a central repository of issuer and trading information for investors These disclosure obligations are comparable to (and in many instances higher than) those for issuers on the TSX or TSX-V
As noted above in order to qualify for listing CNSX Markets issuers prepare and post the
Listing Statement The Listing Statement itself must be updated annually and refiled just like an
Annual Information Form To continue to qualify for listing every CNSX issuer must post press releases to disclose all material information along with notices of corporate transactions (similar to the documentation provided to the TSX and TSX-V by their listedissuers which is considered
public but which is not as easily available for viewing)
To maintain its listing CNSX requires a listed issuer to file a Monthly Progress Report (MPR) and a quarterly update to the Listing Statement (see Form 7 and Form 5 respectively attached as
Exhibit C) The MPR must be posted before the opening of trading on the fifth trading day of
each month The MPR is not intended to replace the issuers obligation to separately report material information forthwith upon the information becoming known to management or to post
Policy 8 of the CNSX Markets Issuer Policies 9
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 6
changes (such as reverse takeovers) require advance approval 9
CNSX conducts periodic and ad
hoc reviews of a listed issuers disclosures to ensure compliance with its rules
Applications for listing on CNSX are supported by a listing statement (the Listing Statement) The Listing Statement includes prospectus-level disclosure including specified consolidated
financial information Managements Discussion and Analysis and audited and interim financial
statements It is reviewed by CNSXs listing team to ensure it is complete and that the company meets the minimum standards for Insiders oflistings applicants are required to complete Personal Information Forms disclosing such things as prior criminal offences regulatory enforcement actions and bankruptcy proceedings and are subject to the same background investigations that are performed for companies listed on the TSX and TSX-V
To be listed on CNSX an issuer must be a reporting issuer or the equivalent in a jurisdiction in
Canada All CNSX-listed issuers are automatically reporting issuers in Ontario because CNSX
Markets is a recognized exchange and may also be a reporting issuer in one or more other
provinces
Reporting issuers are required by Canadian securities laws to file unaudited interim financial
statements every quarter annual audited financial statements and an Annual Information Form
(which is the basic annual of all Canadian Allreport required reporting issuers) statutory continuous disclosure documents are required to be posted in The System for Electronic
Document Analysis and Retrieval (SEDAR) and CNSX provides links to SEDAR as part of its
Listing Disclosure Hall on the CNSX website at wwwCNSXca (the Website)
CNSX-listed issuers are required to disclose information over and above that mandated by applicable securities laws (see below) and must post and update that information on the Website a central repository of issuer and trading information for investors These disclosure obligations are comparable to (and in many instances higher than) those for issuers on the TSX or TSX-V
As noted above in order to qualify for listing CNSX Markets issuers prepare and post the
Listing Statement The Listing Statement itself must be updated annually and refiled just like an
Annual Information Form To continue to qualify for listing every CNSX issuer must post press releases to disclose all material information along with notices of corporate transactions (similar to the documentation provided to the TSX and TSX-V by their listedissuers which is considered
public but which is not as easily available for viewing)
To maintain its listing CNSX requires a listed issuer to file a Monthly Progress Report (MPR) and a quarterly update to the Listing Statement (see Form 7 and Form 5 respectively attached as
Exhibit C) The MPR must be posted before the opening of trading on the fifth trading day of
each month The MPR is not intended to replace the issuers obligation to separately report material information forthwith upon the information becoming known to management or to post
Policy 8 of the CNSX Markets Issuer Policies 9
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 7
the forms required by the CNSX Listing Policies The MPR is intended to keep investors and the
market informed of the issuers ongoing business and management activities that occurred during the preceding month Issuers are advised not to discuss goals or future plans unless they have
crystallized to the point that they are material information as defined in the CNSX Listing Policies The discussion in the MPR must be balanced and Thefactual non-promotional quarterly update to the Listing Statement must include an update for investors Managements Discussion and Analysis and the unaudited quarterly financiats
In addition to CNSX-specific rules CNSX-listed issuers are subject to the same Canadian timely disclosure rules to SEC(ie equivalent current report and US stock exchange press release
requirements) as TSX and TSX-V-listed issuers arising under Canadian securities laws and
those rules are administered and monitored by IIROC as the regulation service provider to CNSX
Markets
The disclosure requirements of CNSX are higher than those for issuers on the TSX or TSX-V in
the following areas which are each unique to CNSX
1 the requirement for a MPR
2 the requirement for a quarterly update to particular sections of the Listing Statement
3 the requirement for an annual update to the Listing Statement (even if an Annual
Information Form isnot required)
4 the requirement to post the results of a securities placement and
the requirement to file a Form 10 which obliges CNSX-listed issuers to make prompt public disclosure of significant transactions or developments (including but not limited to
material acquisitions dispositions options and joint venture agreements or license
agreements as well as transactions or series of transactions with a related person)
The Website displays both the information posted by each CNSX-listed issuer and market data
Investors can access timely and meaningful disclosure concerning issuers trading information
and market data on the Website
In addition to disclosure requirements CNSX-listed issuers are subject to certification
requirements A senior officer or director of a CNSX-listed issuer is required to certify in the
MPR that there is no material information concerning the issuer which has not been publicly disclosed that all information in the MPR is true and that the issuer is in with allcompliance applicable securities legislation (as such term in defined in National Instrument 14-101) and all
CNSX requirements (see Form 7 in Exhibit C) Similarly a senior officer or director of a
CNSX-listed issuer must certify in the quarterly update to the Listing Statement that there is no
material information concerning the issuer which has not been publicly disclosed that all
information in the quarterly update is true and that the issuer is in compliance with all applicable
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 8
securities legislation and all CNSX requirements (see Form 5 in Exhibit C) A certification is
also required with respect to significant corporate transactions or developments including related
party transactions (see Form 10 in Exhibit C) CNSX certification requirements ensure that
issuers management turn their minds to compliance with applicable rules and help foster a
compliance culture
Monitoring compliance with the timely disclosure rules and surveillance of overall market
integrity is performed by IIROC IIROC also investigates potential instances of insider trading and market manipulation and forwards the results to the relevant securities commission(s) for
follow-up action including to FINRA and US exchanges 1deg
IIROC also directly enforces
UMIR and its conduct rules against Dealers and their personnel (Please note that IIROC carries
out similar activities for Pure Trading as applicable ie any monitoring of issuer-related rules-
such as timely disclosure is already done on behalf of the listing exchange but general market
integrity surveillance is carried out on behalf of Pure Trading)
CNSX undertakes periodic compliance reviews to determine issuers compliance with applicable CNSX rules These are on an ad-hoc basis (eg following up on a complaint from an investor or
IIROC) and a systematic basis (periodically reviewing an issuers entire continuous disclosure
record) CNSX Markets uses a risk analysis to prioritize reviews similar to that used by the
Commissions in their continuous disclosure review CNSX does not make on-siteprograms
inspections of listed issuers but IIROC does conduct periodic on-site inspections of Dealers
CNSXs sanctions for issuer include andnon-compliance suspension delisting
Listing Fees
CNSX charges listed issuers an initial one-time fee of $10000 and a fixed maintenance fee of
$300 per month ($3600 per annum)
The Trading System
The Trading System (the System) is screenbased and fully automated The System provides Dealers with order display including price and volume recent trade history and other market
information The System is open for trading during regular trading hours all business dayson
Dealers are able to access the System on a secure basis and are able to configure the display of
the System to their individual preferences
IIROC is an affiliate member of the Intermarket Surveillance Group comprised of 31 exchanges around the
world including all major stock exchanges whose mandate is to promote effective market surveillance among
international exchanges In addition the CSA has an extensive cooperative enforcement relationship with the SEC
See the Memorandum of Understanding between the SEC and the OSC and the Quebec and British Columbia
securities authorities dated January 7 1988
10
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 9
CNSX has since with no of On Octoberoperated inception significant interruption trading 17 2008 CNSX Markets successfully migrated trading of CNSX-listed issuers to the same trading engine as for Pure Trading which is more powerful
Order Entry and Handling Market Makers
CNSX provides trading fee incentives to Dealers willing to become market makers in an issuers
stock and market makers have an exclusive privilege to enter orders on behalf of another dealer
(in their designated stocks) CNSXs system of voluntary market-making is open to all approved traders who are employed by any of CNSXs 87 participating Dealers Market makers on CNSX
are required to maintain a two-sided market This ensures that for those stocks with a market
maker there is always a bid or an offer available to any investor coming in through Dealerany The number of securities that do not have a market maker varies from time to time As of
February 28 2008 70 of listed equity securities had at least one market maker posting bids and
offers
CNSX Trading Fees
The price schedule for trading equity securities (shares warrants and rights) on CNSX is as
follows
For securities trading at or above $100 $00014 per share with a maximum fee of $5000 and a
minimum fee of $100 per trade For securities trading below $100 $00006 per share with a
maximum fee of $5000 and a minimum fee of $100 tradeper
Odd lot trades are charged at the same rate per side with the maximum fee side reduced toper $050 and with no minimum fee
Crosses are charged a flat fee of $975 tradeper
Designated Market Makers passive orders in their designated stocks receive a credit of $0003
per share per trade for stocks trading below $100 and $0007 for stocks trading at or above
$100 with a maximum credit of $25 per trade This credit is also applied to any and all Market
Maker odd lot trades in their designated stocks to a maximum of $50 per trade
There are no monthly access fees for Dealers participating in CNSX
Pure Trading
CNSX Markets facility Pure Trading was the first competitor to the TSX in Canada to offer a
fully electronic continuous auction market trading TSX-listed securities Like regional exchanges and ECNs in the United States Pure Trading competes based upon speed costs and
the features of its trading system Access to Pure Trading is available to all CNSX Dealers Any
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
and Settingskshh8739kLoca1SettingsTemporary htemet Fries 1222008
-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 10
TSX-listed security is eligible to trade on Pure Trading as long as it has not been suspended or
delisted by the TSX In addition CNSX Markets and ITS Online Ltd (ITS) provide Pure
Compass a smart order router which offers clients the opportunity to connect to Canadian
marketplaces (regulated exchanges quotation and trade reporting systems and ATSs) with a
single point of access that efficiently meets their regulatory and best execution obligations with a
high capacitylow latency application
As TSX-listed companies such issuers are subject to the disclosure and other Canadian securities
law requirements applicable to Canadian reporting issuers As noted above the TSX has been
included in Rule 902(b) as a designated offshore securities market since the adoption of the rule
and TSX-V has also been included As a trading facility operated by a recognized Canadian
stock exchange Pure Trading is subject to the same OSC oversight as the TSX Pure Trading operates on a state-of-the-art electronic trading platform that is licensed from NASDAQ-OMX and is used in several larger exchanges around the world
Pure Trading Fees
Each CNSX Dealer must pay a one-time application fee of $2500 plus GST with their
completed application and a monthly basic trade fee of $500
Trading fees and rebates in the continuous auction market on Pure Trading are based on the
standard industry activepassive model The passive side of each trade is the order that is
entered into the electronic order book and is the liquidity provider while the active side is the
order that is entered later and is matched with the passive order to create the trade The active
side of the trade is therefore the liquidity taker and is charged a fee while the passive side earns
a rebate The fees and rebates are currently as follows
For TSX-V securities
There is no fee charged for the passive side of a trade
There is a fee of $050 for each same day active order resulting in a trade no matter how many orders it interacts with These feespassive are capped at $5000 per month per participating
dealer Participating dealers may instead elect in advance to pay a fee of $3000 per month for
the right to remove an unlimited amount of liquidity ie they may place an unlimited number of
active orders for $3000 per month
For TSX securities
Securities trading for less than $100 Fees to Take Liquidity $00026
Liquidity Provider Rebate
Monthly passive volume Xlt=60MM shares $00018
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 11
Monthly passive volume Xgt60MM shares $00022
Securities trading for $100 and above
Fees to Take Liquidity $00037
Liquidity Provider Rebate
Monthly passive volume Xlt=I 5MM shares $00027
Monthly passive volume XgtI 5MM shares $00032
Trades occurring in the market-on-open facility will have each side designated as active or
passive according to time priority and will either be charged a fee or earn a rebate on the same
terms as in the continuous auction market Trades in debentures will not be included in the
calculation of monthly passive volumes to determine the liquidity provider rebate and will be
priced accordingly
Debentures or Notes (Per $1bull000 Par Value) Fees to Take Liquidity $009
Liquidity Provider Rebate $007
Intentional crosses are not charged a fee and do not earn a rebate
Market Activity
As shown on Exhibit D in 2007 CNSX traded about 400 million securities in more than 32000 trades with a value of approximately $230 million The average trade value was $7057 which
reflects the fact that participation in the CNSX market is largely by retail investors rather than
institutions This with an trade value of $5184 on the TSX-V over the samecompares average
period which also has a largely retail investor base
There are over 120 securities listed on CNSX (including Province of Manitoba Bonds) and the
market capitalization of all securities listed on CNSX Markets is around $560 million In 2007 CNSX-listed issuers raised more than $220 million in new capital much of that after listing
Volumes on Pure Trading regularly exceed 9 million shares day Pureper Trading typically accounts for more than 5 of the combined national daily trading activity in over 50 of the most
actively traded Canadian-listed securities See also Exhibit D
Corporate Governance
CNSX Markets is a private company with its head office in Toronto and another office in
Vancouver
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 12
Independent Directors
CNSX Markets believes that arrangements with respect to the appointment removal from office
and functions of the persons ultimately responsible for making or enforcing the rules of CNSX
Markets namely the governing body are such as to ensure a proper balance between the
interests of the different entities desiring access to the facilities of CNSX Markets and companies seeking to be listed on CNSX
The constating documents of CNSX Markets as supplemented by a unanimous shareholders
agreement provide that its Board will have a minimum of five and a maximum of 13 directors
In order to ensure a diversity of representation on the Board the recognition order provides that
at least 50 of the Board shall be independent directors An independent director is one who
is not an associate or a partner director officer employee or shareholder of a CNSX Dealer an
officer or employee of CNSX Markets or an affiliate a person owning or exercising control over
10 or more of the outstanding voting securities of CNSX Markets (a significant shareholder) or affiliate or associate of suchany any person
Accordingly CNSX Markets independent directors are individuals who are not connected with
its significant shareholders management marketplace participantsor
Capacity and Integrity of Systems
For each its order order dataof systems that support entry routing execution feeds trade
and trade andreporting comparison capacity integrity requirements CNSX Markets
(a) on a reasonably frequent basis and in any event at least annually
(i) makes reasonable current and future capacity estimates
(ii) conducts capacity stress tests of critical systems to determine the ability of those
systems to process transactions in an accurate timely and efficient manner
(iii) develops and implements reasonable procedures to review and keep current the
development and testing methodology of those systems
reviews the(iv) vulnerability of those systems and data centre computer operations to
internal and external threats including physical hazards and natural disasters and
(v) establishes reasonable contingency and business continuity plans
(b) annually causes to be performed an independent review and written report in accordance
with established audit procedures and standards of its controls for ensuring that it is in
compliance with paragraph (a) and conducts a review by senior management of the report containing the recommendations and conclusions of the independent review and
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
mhtmlfileCkDoeuments and Settingsbullshh8739kLocal SettingsbullTemporary lntemet Files 1222008
-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 13
(c) promptly notifies the OSC of material failures andsystems changes
Current Capacity
The CNSX Markets trading systems have been built to meet initial and medium term
requirements In general terms the systems have been built to provide the highest possible availability security and efficiency All hardware and software components are duplicated within the architecture of the systems so as to provide for complete redundancy in the event of
failure of any single component This principle of design is fully extended to all aspects of
CNSX Markets operations to ensure that trading may continue at all times without interruption
The initial system has been sized to provide sufficient capacity for levels of trading much higher than what is expected
Future Capacity
On a monthly basis the capacity of the systems is compared to current and expected future
market activity to ensure that the system continues to provide more than sufficient capacity so
that CNSX Markets is able to operate with the highest availability and efficiency The server
technology which provides the base for capacity and efficiency of the two markets is easily expandable without interruption to service At appropriate intervals data is transferred from the
systems databases to external storage devices so that CNSX Markets can ensure long term
retention of all market data and provide for appropriate disaster recovery plans
Contingency
As noted above CNSX Markets technology architecture including the hosting environment and
network connectivity provide for complete redundancy and the highest levels of security for all
components of the system In essence if one aspect of either system fails to function there is a
duplicated component which will seamlessly take over that part of the operation The systems are monitored 24 hours a day 7 days a week to ensure that all components continue to operate and remain secure At least one member of CNSX Markets technical staff is on call at all times
to ensure that any repair is completed as soon as possible
Initially CNSX Markets has ensured that its primary trading systems do not require an off-site
back-up except in the case of a major disaster by designing each base system with complete redundancy for all components Also all trading information is stored at 15 minute intervals at a
secure off-site location In the event of a major disaster CNSX Markets will have stored market
data to the time of the disaster and be able to reconstruct the affected market and the
at a new site within approximately four weeks Eventually once the trading volumes and
revenues grow to sufficient levels CNSX Markets intends to build an off-site hot back-up system
up systems
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 14
CNSX Markets Rules and Fees
Purpose of Rules
CNSX Markets has established rules policies and other similar instruments (Rules) that are
necessary or appropriate to govern and regulate all aspects of its business and affairs to
foster compliance with securities legislation prohibit fraudulent and manipulative acts and practices promote just and equitable principles of trade foster cooperation and coordination with persons or companies engaged in
regulating clearing settling processing information with respect to and
facilitating transactions in securities and
provide for appropriate discipline
DiscipBnary Rules
CNSX Markets has general disciplinary and enforcement provisions in its Rules that apply to any
person or company subject to its regulation Similarly to TSX and TSX-V CNSX Markets has
retained IIROC to act as for and withagent monitoring enforcing compliance its rules CNSX
Dealers are required to attorn to the jurisdiction of IIROC
Due Process
CNSX Markets requirements relating to access to the facilities of CNSX Markets the
imposition of limitations or conditions on access and denial of access are fair and reasonable
Parties aare given an opportunity to be heard or make representations and CNSX Markets keeps record gives reasons and provides for appeals of its decisions
Fees
Any and all fees imposed by CNSX Markets are equitably allocated They do not have the effect
of creating barriers to access and are balanced with the criteria that CNSX Markets has sufficient
revenues to satisfy its self-regulatory responsibilities
The recognition order requires CNSX Markets process for setting fees to be fair appropriate and transparent
Requirements for Classification as Designated Offshore Securities Market
Rule 902(b)(2) identifies seven factors that will be considered by the SEC in determining whether to classify a non-US securities market as a designated offshore securities market In
adopting Regulation S the SEC stated that Rule 902(b)(2) lists non-exclusive attributes that will
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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OSC -Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 2 of 4
rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 15
be considered in making such designations and that such designations will be made on a case-
by-case basis through the interpretive letter process based upon consideration of all the facts
pertaining to a particular market11
As indicated below we submit that CNSX Markets has each of the attributes listed in Rule
902(b)(2)
A Organization Under Foreign Law
CNSX Markets was incorporated under the Business Corporations Act (Ontario) (OBCA) 12
on
November 24 2000 In addition it is governed by provisions of the Securities Act (Ontario) (OSA)
13 and NI 21-101
Bo Association with a Generally Recognized Community of Brokers Dealers Banks or
Other Professional Intermediaries with an Established Operating History
CNSX Dealers are required to be members in good standing of IIROC (and therefore are all
registered dealers in Canada) As such they will be subject to IIROC rules with respect to sales
practices capital and margin and business conduct Access to securities traded on CNSX
Markets including by non-Canadian broker-dealers is only through a CNSX Dealer CNSX
Markets does not grant them or allow them direct access from outside of Canada CNSX Markets
not on business in the US The 87 CNSX Dealers indoes carry currently represent aggregate approximately 99 of the domestic trading volumes in Canadian equity markets
C Oversight by a Governmental or Self-Regulatory Body
As a stock exchange CNSX Markets is subject to the same oversight by the OSC as the TSX
OSC oversight includes
a) Review and prior approval of all new rules and rule amendments in accordance with the
rule protocol attached to the recognition order (Exhibit B)
b) Quarterly filings to the OSC and the Exempting Regulators in accordance with Form
21-10IF1
c) Periodic on-site oversight reviews by OSC staff
d) Quarterly update meetings with OSC staff and
11 See SEC Release No 33-6863 (April 24 1990)
12 RSO 1990 c C38 as am
13 c asRSO 1990 S5 am
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 16
e) An automation review programme (ARP) with the OSC similar to that developed by the SEC
As noted above all Dealers must be members of IIROC This is because CNSX Markets like
the TSX and the TSX-V does not itself perform member regulation Instead IIROC performs these functions in a manner similar to FINRA In addition also as noted above IIROC performs market regulation functions such as market surveillance trade desk compliance reviews investigations and enforcement in a manner similar to the market regulation and surveillance
divisions of US stock exchanges IIROC administers UMIR which is a body of rules
to allapplicable trading on regulated equity marketplaces governing such things as manipulative and deceptive trading practices short sales best execution and customer-principal trading
CNSX Markets rules and policies other than housekeeping rules are filed with the OSC and
published for public notice and comment prior to implementation except for limited
circumstances where there is an urgent need to implement a rule in which case the rule will be
effective immediately subject to withdrawal if the OSC disapproves the rule either before or
following notice and comment Housekeeping rules are filed with the OSC and are effective
immediately
-Form 21-101F1 Information Statement Exchange or Quotation and Trade Reporting System contains other periodic reporting obligations
D Oversight Standards Set by an Existing Body of Law
The OSA provides that a person or company cannot carry on business as a stock exchange in
Ontario unless it is recognized by the OSC or exempted from recognition by the OSC The OSA
animposes obligation on a recognized stock exchange to regulate the operations and the
standards of practice and business conduct of its members and their representatives in
accordance with its by-laws rules regulations policies procedures andinterpretations practices
14
The OSA provides that the OSC may take action it deems in the public interestany necessary with respect to a recognized stock exchange The OSA also provides for appeals of decisions of
a recognized stock exchange to the OSC
NI 21-101 sets additional requirements for stock exchanges (for example that rules and
admission standards must not be discriminatory or constitute an unreasonable burden on
competition)
OSA Section 21 14
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 9 of 13-
(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 17
Eo Reporting of Securities Transactions on a Regular Basis to a Governmental Body or
Self-Regulatory Body
As noted below CNSX Markets order books and trade and quote information are available on a
real-time basis to subscribers and some of that information is also displayed on a delayed basis
on the CNSX Markets website (which is divided into a CNSX and a Pure Trading website) Trades are completed in the trading system and reported immediately IIROC receives a real-
time feed to enable market monitoring and surveillance of both markets
CNSX and Pure Trading information is disseminated via real time feeds with information that is
essentially the same as the Level 1 and Level 2 feeds commonly used in the USI For securities
traded on multiple marketplaces in Canada data vendors have created feeds that consolidate
order books and identify the marketplace on which any order is booked or on which any
particular trade occurs Clients of dealers receive trade confirmations that expressly state the
marketplace(s) on which an order was filled or that an order may have been filled on multiple marketplaces and that the dealer will provide details of that information upon request IIROC
receives data from all marketplaces and consolidates it for regulatory purposes We also
understand that the Canadian Securities Administrators intend to an informationapprove
processor under NI 21-101 in the near future
Fo A System for Exchange of Price Quotations through Common Communication
Media
It is a requirement of recognition by the OSC that CNSX Markets produce and make available
real time pre-trade and post-trade information (this is for both CNSX and Pure Trading) Details
of CNSX Markets order books trades and quotes are made available in real time to data vendors
directly or indirectly through an agreement with TSX Datalinx which also sells data from the
TSX and the TSX-V This market data is available internationally including in the US
The real-time market data is also used by order entry system vendors who provide CNSX
Dealers with the devices to access the markets operated by CNSX Markets
As mentioned previously some market data is available on a delayed basis on the CNSX and
Pure Trading websites
G An Organized Clearance and Settlement System
All trades on the markets operated by CNSX Markets are cleared and settled through the
facilities of CDS which also clears and settles trades for among other things all the equity marketplaces in Canada including TSX and TSX-V
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Mr Paul Dudek
February 24 2010
Page 18
Conclusion
We hereby request that CNSX Markets including both CNSX and Pure Trading be designated as a designated offshore securities market for the of Regulation S CNSX Markets ispurposes
extensive and in and the forsubject to oversight regulation Canada meets criteria recognition stated in S andRegulation used in assessing other international marketplaces Such designation will aid in realizing Canadian securities policy objectives of promoting the development of
competing marketplaces Such designation will also help ensure that all investors trading in
Canadian markets will have access to the best available prices especially when reselling securities under Rule 904 of Regulation S
CNSX Markets hereby applies for designation as a designated offshore securities market for
the purposes of Regulation S promulgated under the Securities Act of 1933 as amended
Please do not hesitate to contact me if you have any comments or questions on the foregoing at
(202) 942-6302
Very truly yours
Laura Badian
CC Robert Cook President CNSX Markets
Cindy Petlock General Counsel and Corporate Secretary CNSX Markets
Winfield Liu Ontario Securities Commission
Susan Greenglass Ontario Securities Commission
D Grant Vingoe Arnold amp Porter LLP
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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L
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
EXHIBIT B
RECOGNITION ORDER
Oder Supplement to the OSC Btdletn
J
IN THE MATTER OF THE SECURmE8 ACT RSO 1990 CHAPTER 85 AMENDEDA8 (the Act)
AND
IN THE MATTER OF CANADIAN TRADING AND QUOTATION INC RECOGNITION ORDER
(secuon 2t2t )
WHEREAS the Canadian Trading and Quotation System Inc (CNQ)has applied for recognition as a quotation and trade reporting system pursuant to section 2121 of the Act
AND WHEREAS CNQ awill operate screen-based automated electronic marketplace
AND WHEREAS hasCNQ agreedto the terms and conditions set out in Schedule A
AND WHEREAS the Commission has received certain representations and undertakings from CNQ in connection with CNQs application for recognition as a quotation and trade reportingsystem
AND WHEREAS the Commission has determined that the recognition of CNQ would not be pTejudicial to the public interest
The Commission hereby recognizes CNQas aquotation and trade reporting system pursuant to section 2121 of the Act subject to the terms and conditions attached at Schedule A
DATED February 28 2003
Paul Moore Howard Wetston
March 21 2003 31
I
2003) 2 oscB (Supp)
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
bull-`bullbullbullbullbullbullbullbullbull`bullbull-bull`bull` bull bull bullbull bull bullbullbullbull bullbullbull--bull
Order Suppkztent to the 0$C Builetln
ii J i ill I ii
SCHEDULE A
TERMS AND CONDITION8
t= CORPORATE GOVERNANCE
(a) CNQs arrangements with respect to the appointment removal from office and
functions of the persons ultimately responsible for making or enforcing the rules policies and other similar instruments (Rules) of CNQ namely the governing body are such as to ensure a proper balance between bulle interests of the different entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and
proportion of directors will be =independent in order to ensure diversity of
representation on the Board An independent directOr is a director that is not
i) an associate director officer or emploYeeof e CNQ Dealer
ii) an officer or employee of CNQ or its affiliates
ifi) an associate director officer or employee of any person or company who
owns or conbols directly bullr indirectly over 10 of CNQ or
iv) a person who owns or controls directly or indirecty over 10 OfCNQ
In particular CNQ will ensure that at least fifty per cent (50 of its directors-will be independent In the eventthat at any time CNQ fails to meetsuch requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure provides for
(i) fair and meaningful representation on its governing body in the context of i
Jthe nature and structure of CNQ and any governance committee thereto and in the approval of Rules J
(ii) appropriate representation of independent directors on any CNQ Board i
committees and
(iii) appropriate qualifications remuneration conflictof interest provisions and limitation of liabilityand indemnification protections for directors and officers
and employees of CNQ generally
2 FITNESS
In order to ensure that CNQ operates with integrity and in the public interest each person or
company that owns or controls directly or Indirectly more than 10 of CNQ and each officer or
director of CNQ is a fit and proper person and the past conduct of each person or company that
i r i i
March 21 zOOS s2 (zOgs) 2s oS(s (Supp
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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OSC -Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 2 of 4
rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Order Supplement to tho GSC Bulletin
owns or controls directly or indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business Of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees imposed byCNQ will be equitably allocated Fees will not have the effect of creating barriers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate and transparent
ACCESSQ
CNQs(a) requirements permit all properly registered dealers that are members of a
recognized SRO and satisfy access requirements established by CNQto access the facilities of CNQ
(b) Without limiting the generality of the foregoing CNQwilI
(i) establish written standards for togranting access CNQ Dealers trading on
CNQ
not(ii) unreasonably prohibit or limit access by a person or company to services offered by it and
(iii) keep records of
(A) each grant of access Jnclud ng for each CNQ Dealer the reasons for
granting such access and
(B) each denial orimitation of access including the reasons for denying or
limiting access any applicantto
FINANCIAL VIABILITYo
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will calculate and report those financial ratios described below to permit trend
analysls and provide an early waming signal wth respect tO the financial health of the company
(c) CNQ will maintain (i) a Ikluidlty measure greater than or equal to zero (il) a debt to cash flow ratio less than or equal to 40t and (iii)a leverage ratio less than or
equal to 401 For this purpose
i ii = it= tl= t t i
26 OSGBMarch 21 2003 bull13-- (2003) (Supp)
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Order to the OSC BlletlnSupplobull i i i i i bulln i il I ill i i i i Jlll
bull
(i) liquidity measure is
+(working capital borrowing capacity) - -2 (adjusted budgeted expenses + adjusted capital expenditures adjusted revenues)
where
(A) working Capital is current assets minus current liabilities
(B) borrowing capacity is the prlndpal amount of long term debt available to be borrowed under loan or credit agreements that are in
force
(c) adjusted budgeted expenses are 95 of the expenses (other than
depreciation and other non-cash items)provided for in the budget for the current fiscal year
(D) adjusted capital expenditures are 50 of average capital expenditures for the previous three fiscal years (except that in each of the first three years adjusted capital expenditures shall be
determined as follows
in the first year after recognition (Year 1) 50 of I3 bull of
Start Up Capital Expenditures in the secQnd year alter recognition (Year 2) 50 of [13
bull
(23rd
Start-up Capital Expenditures plus Year 1 Capital Expenditures)]and
in the second after bull year recognition (Year 3) 50[13rbull(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
where Start-up Capital Expenditures are the total Capita Expenditures prior to the commencement of quotation and trading on
CNQ and
(E) adjusted revenues are 80 of revenues plus 80 of investment
income for the previous fiscal year
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit
drawdowns term loans (current and long-term portions) debenturesand
but excluding accounts payables accrued expenses and other liabilities)to EBITDA (or earnings before interest taxes depreciation and amortization) for the previous month multiplied by 12 and
(ill) financial leverage ratio is the ratio of total assets to shareholders bull equity
in each case following the same accounting principles as those used for the audited
finanbullal statements of CNQ except as provided in paragraphs h and i below
March 21 2003 34 (2003)26 OSGB (SUPlP)
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
mhtmlfileCkDoeuments and Settingsbullshh8739kLocal SettingsbullTemporary lntemet Files 1222008
-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Order SupPlement to the OSC Bulletin
(d) On a quarterly basis (along with the quarterly financial statements required to be filed pursuant to paragraph 10) CNQ will report to the Commission the monthly-calculation of the liquidity measUre and debt to cash flow and financial leverage ratios the appropriateness of the calculations and Whether alternativeany calculations should be considered
(e) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio or the financial leverage ratio in any month it shall immediately report to the Commission or itsstaff
Except as provided in g below if CNQ bullails to maintain-any of the liquidity measure the debt to cash flow ratio or the financial levePage ratio for a period of more than three months its President a letter thewill immediately deliver advising Commlssion or-its staff for the continuedof =thereasons ratio deficiencies and the
taken tosteps being raddfy the problem and CNQ will not without the prior approval of a Director of the makeCommission any capital expenditures not
reflected inalready the financial statements or make any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a startup operation expecting to incur losses during the first year of operations paragraphs e and f above shall not apply during the first
year of operations if the debt to cash flow ratio is negative or greater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until the deficiencies have been eliminated for six months except for bonuses payable to employees under a profit sharing bonus plan included in the forecast finandal statements provided to the Commission as
part of the application for recognition
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated 2002November 29 (=Subordinated Convebullble Debentures) as
for theequity purposes of calculating the financial ratios in paragraph d above provided that
theO) amOunt of the Subordinated Convertible Debentures recognized as I
equityshould not exceed $5000000 J
i
i() CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such willpayment i result in CNQ not meeting the-financial ratios and
J(iii) prior to makirlga cash interest payment or principal repayment CNQ ishould demonstrate to the satisfaction of the Commission that it will
continue to meet the financial ratios after paymenL
Marbull 21 2Qobull bulls (2on3) 26 OSCB (Supp)
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Order SUpplement to lho 08C Bu]letn iii i
(i) CNQ may recognize the debts owed by CNQ described in the subordinated
agreement dated December 23 2002 befween 1141216 Ontario Limited Wendsley Lake Corporation CNQ and The Business Engineering Science amp
Teohnology Discoveries Fund Inc (Junior Debt) as equity for the purposes of
calculating the financial ratios in paragraph c above provided that
(i) CNQ shall not repay the Junior Debt or pay cash interest on the Junior Debt
if such payment will result In CNQ not meeting the financial ratios and
(ii) prior to making a cash interest payment or principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meet the financial ratios after payment
6= REGULATION
(a) CNQ will maintain its ability to perform its regulationunctions including setting requirements governing the conduct of CNQ Dealers and CNQ IssUers and
disdpllning CNQ Dealers and CNQ Issuers
(b) CNQ has retained and Will continue to retain Market Regulation Services Inc (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services whiQh have been approved by the Commission CNQ will provide to the Commission on an annual basis a list outlining the regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject to the prior approval of the
Commission
(c) CNQ will provide the Commission with an annual report with such information
regarding its affairs as may be requested from time to time The annual report will
be in Such form as may be specified by the Commission from time to time
(d) CNQ Will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (Including the President and CEO) will at least annually assess the performance by RS Inc of its regulation functions and report to the
Board together with any recommendations for improvements CNQ will provide the Commission with copies of suCh reports and shall advise the Commission of
any proposed actions arising therefrom
(f) CNQshall provide the Commission with the information set out in Appendix A as
amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of its systems that support order entry order routing execution data feeds bade
reporting and trade comparison capacity and integrityrequirements CNQ will
illi11 ill i ii i i
Marcopyl21 2003 38 (2003) 26 OBCB (iSupp)
I I
J i
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Order Sullplementto the OSC Bulletin
bull
tt tt
(a) on a reasonably frequent basis and in any event at least annually
(i) make reasonable current and future capacity estimates
conduct(ii) capacity stress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficient mannerbull
(]ii) develop and implement reasonable procedures to review and keep current the development and testing methodology of those systems
(iv) review the vulnerability of those systems and data centre computer operations to internal and extamal threats including physical hazards and natural disasters
(v) establish reasonable contingency and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of Its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of material failuressystems and changes
PURPOSE OF RULES=
(a) CNQ will establish Rules that are or to andnecessary appropriate govern regulateall aspects of its business and affairs
(b) More specifmallyCNQ will ensure that
O) the Rules are todesigned
ensure(A) compliance with securities legislation
(B) prevent fraudulent and manipulative acts and practices
(C) promotejust and of tradeequitablepdnciples
(D) foster cooperation and coordinationwlth persons or companies engaged in regulating clearing settling processing information with
respect to and facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
Maroh 31 2003 37 osca(s00s) bull (SupH
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
1
Order Supplement to the OSC Bulletin
i
(A) permit Unreasonable discrimination among CNQ Issuers and CNQ
Dealers or
(B) impose any burdenon competition that is not necessary or
appropriate in furtherance of securities legislation
(ii) the Rules are designed to ensure that Its business is conducted in a
manner so as to afford protection to investors
RULES AND RULE-MAKING
CNQ will comply with the rule review process set out in Appendix B as amended from time to
time con(bulleming Commission approval of changes bl its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of each quarter end and
audited annual financial statements wibullin 90 days of each year end prepared in accordance with generally acceptbullpd accounting prindples
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any
person or company subject to Its regulation Is appropriately disciplined for
-violations of securities legislation and the Rules
(b) CNQ will have general disciplinanjand enforcement provisions in its Rules that will
apply to any person or company subject to Its regulation
12 DUE PROCESS
CNQ will ensure that
(a) its requirementsrelating to access to the facilities of CNQ the Imposition of
limitations or cQnditions on access and denial of access are fair and reasonable
(b) parties are given an opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisionsbull
13 INFORMATION SHARING
CNQ will share information and otherwise co-operate with the Commission and its staff the
Canadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation of
securities firms and financial institutions
OSCBUarbull Zl 20o4 bull (200=) 26 (Supp)
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Order 8upglement to the OSC Bulletin i i i
14 ISSUER REGULATION
(a) CNQ has sufficient authority over its issuers
(b) CNQ centardes out appropriate review procedures to monitor and enforce Issuer
compliance with the Rules
(c) CNQ will amend its Policies and Forms from time to at thetime request of the Director Corporate= Finance to reflect changes to the disclosure requirements of Ontario securities law
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and settlement through a clearing agency recognized by the Commission for the of the Securities Actpurposes (Ontado)
16 TRANSPARENCY REQUIREMENTS
willCNQ comply with the pre-trade and post-trade transparency requirements set out in National Instrument 21-101 Marketplace Operation
17 ADDITIONAL NFORMATION
(a) CNQ has completed and submitted Form 21-101F1 the(includingthe exhibits) to Commission
(b) CNQ will provide the Commission with any addilional Information the Commission may require from time to time
i i i i i ll
March 21200= 89 2003) 26 OSGB (Suipp)
i
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
mhtmlfdeCK)ocuments and Settingsshhg739Local SettingsTemporaryInternvt Files 1222008
-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
mhtmlfileCbullDocuments and Settingsshh8739bullJocal SettingsTemporary Intemet Files 1222008
OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
D
Order Supplement to the OSC Bulletin
Appendix A
information to be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the commissiona report summarizing all exemptions or waivers granted pursuant to the rules policies or other similar Instruments (Rules) to any CNQ Dealer or CNQ Issuer the Thisduring period summary should include the following information
(a)
The name of tibulle CNQ Dealer or CNQ Issuer
(b) The type of exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
A(d) description of CNQ stabulls reason for the decision to grant the exemption or
waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submitto the commission a report containing the following information
(a) The numberofqUotation applications filed
(b) The number of quotation applicationsthat were accepted
(c) The-number of quotation applications that were rejected and the reasons for
rejection by category
(d) The number of quotation applications that were withdrawn or abandoned and if
known the reasons why the application was withdrawn or abandoned by category
(e) The number of quotalion applicatiOnS filed by CNQ Issuers as a result of a
Fundamental Change
(t) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
g) The number of quotation applications filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and the reasons for rejection by category
(h) The number of quotation appiications filed by CNQ Issuers as a result of a
(2 oo3)bullosbullBbull u ej)March 212003 4a
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
= -bull o
g
Order Supplement to the 05C BUJletin
i ii i ii i ii i i i
Fundamental Change that were or abandonedwlthdrewn and if known the reasons why the application was withdrawn or abandoned by category
In each of the foregoing cases the numbers shall be broken down and inby industry category
any other manner that a Director of the Commission requests
3 Notification of andsuspensions disqualifications
Ifa CNQ Issuer has been Suspended or disqualified from qualification for quotation CNQ will immediately issue a press release setting out the reasons for the suspension and file this information with the Commission
March 2t ZOOS 41 (2OO3)260=CS (Supp)
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
mhtmlfileCkDoeuments and Settingskshh8739bullI_AacalSettingsTemporary Internet Files 1222008
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
mhtmhfileCADocuments and Settingsbullshh8739bullLocalSettingsTemporary Intemet Flies 1222008
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
- degbull
Order Stbullpplement to the 08C Bulletin i
Appendix B
Rule Review Process
CNQ will file with the Commission eaGh new or amended rule policy and other similar instrument (Rules) adopted byits Board
deg
More specifically CNQ will file the followlnginformation
(a) the proposed Rule
(b) a notice of publication including
(i) a description of the proposed Rule and its impact
() a concise statement together with supporting analysis of the nature purpose and effect of the Rule
P) possible effects of the Rule on participants and the costs of compliance the marketplace competition
(iv) a description of the rule-maidng process Including a description of the context in which the pmp0sed Rule was developed the process followed the issues considered the consultation process undertaken the alternative approaches considered and the reasons for rejecting the alternatives
(v) where the proposed Rule requires technological changes to be made by CNQ CNQ Dealers or CNQ IsSUers CNQ will provide a description of the
implications of the Rule and where possible an implementation plan including a description of how the Rule will beimplemented and the timing of the implementation and
a reference to other judsdiddons including an indication as to whether another regulator In Canada the United States or another jurisdiction has a
comparable rule or has made or Is contemplating making a comparable rule
and if applicable a comparison of the proposed Rule to the rule of the
other jurisdiction
The Commission will publish for a 30 day comment period in its bulletin or on Its website
the notice filed by CNQ and the proposed Rude If amendments to the Rule are necessary as a result of comments received the Commission shall have discretion to determine
whether the Rule should be m-published for comment
A Rule will be effective as of the date of Commission approval or on a date determined
by CNQ whichever is later =
iI ii i
M=bull Zl =oo3 42 (2003) 960SGS (Supp)
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
1
Order Supplement 1o the OSC Bulletin i i i
5 If CNQ is of the view that there is an urgent need to Implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with written notice of the urgent need to implement the Rule prior to the submission of the Rule to CNQs board of directors and
(b) includes in the notiCe referenced in 2(bXi)an analysis in support of the need for immediate Implementation of the Rule
If the Commission does not agree that immediate Implementationis necessary the Commission will advise CNQ that is disagrees and provide the reasons for its
disagreement If no notice is rece ved by CNQ within 5 business days of the Commission receiving CNQs notification CNQ shall assume that the Commission with itsagrees assessment
A Rule that is implemented immediately shall be published reviewed and approved in
aocordance with the proGedure set out above Where the Commission subsequentlydisapproves a Rule that was implemented immedlateiyCNQ shall repeal the Rule and publish a notice informing its marketplace participants
=
The terms conditions and procediJres set out in this SeCton may be varied or waived bythe Commission A waiver or variation be and be made for amay specificor general may time or for all time
Maroh bullt 20o3 4a (bull) 2e o$os (supp)
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 9 of 13-
(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
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15
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i 5oo
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CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
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2i i bull
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10
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+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Ontario Securities Commission In the Matter of Canadian Inc 1 of 13- -Trading and Quotation Page
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION INC
RECOGNITION ORDER
(Section 21 of the Act)
AND
REVOCATION ORDER
(Section 144 of the Act)
WHEREAS the Commission issuedan order dated February 28 2003 recognizing the Canadian Tradingand Quotation bullSystemInc as(CNQ) a quotation and trade reporting system (QTRS) pursuant to section
2121 of the Act (QTRS Recognition Order)
AND WHEREAS CNQ has nowappied for recognition as a stock exchangepursuant to section 21 of the Act so that issuers traded on CNQ will automatically become repobullng issuers in Ontario upon acceptance for trading on CNQ
AND WHEREAS CNQ has agreed to be recognized as a stock exchange on substantially similar terms and conditions as contained in the QTRS Recognition Order
AND WHEREAS CNQ requests that the QTRS Recognition Order be resinded so that it will be recognized only as a st00k exchange
AND WHEREAS CNQ is operating a screen-based automated electronic marketpiace
AND WHEREAS the Commission has received Certain representations and undertakings from CNQ in connection with CNQsapplication for recognition as a stock exchange
AND WHEREAS CNQs applicationfor recognition as a stock exchange incorporates by reference its
application for recognition as a QTRS dated July 16 2002 modified 0nlyto reflect the fact that CNQ has now commenced trading operations
AND WHEREAS the Commissionhas determined that the recognition of CNQ as a stock exchange on
substantially similar terms and conditions as in the QTRS Recognition Order would not be prejudicial to
the public interest
THE COMMISSION hereby recognizes CNQ as a stock exchange purSuanttosection 21of the Act subject to the terms and conditions attached at Schedule A and revokes the QTRS Recognition Order
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-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 9 of 13-
(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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L
Ontario -
Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-Ontario Securities Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 2
pursuant to section 144 of the Act
May 72004
David A Brown Susan Wolburgh Jenah Robert L Shirriff
SCHEDULE A
TERMSAND CONDITIONS
1coRPORATEGOVERNANCE
(a) CNQs arrangementswith respectto the appointmentremoval fromoffice and functions of the persons ultimately responsible for making orenfoming the rules policies and other similar instruments (Rules) of CNQ namely the
goveming body are such-asto ensure a proper balance between the interests of thedifferent entities desiring access to the facilities of CNQ (CNQ Dealer) and companies seeking to be quoted on CNQ (CNQ Issuer) and a reasonable number and proportion of directors will be independent in order to ensure
diversity of representation on theBoard An independent director is a director that is not
i) an associate direotor officer or employee of a CNQ Dealer
ii)an cbullficer or employee of CNQ or itsaffiliates
iii) an associate director officer or employee of any person or
company who owns or controls directly Or indirectly over 10 of
CNQ or
iv) a person who owns or controls directly orindireotiy over 10 of CNQ
in particular CNQ willensure that at least fifty per cent (50 of its directors will be independent Inthe event that at any time CNQ tails to meet such
requirement it will promptly remedy such situation
(b) Without limiting the generality of the foregoing CNQs governance structure
provides for
(i) fairand meaningful representation on its governing body in the
context of the nature and structure of CNQ and any govemance committee thereto and in the approval of Rules
(ii)appropriate representation of independent directors on any CNQ Board committeesand
(iii) appropriate qualifications remuneration confllctOf interest
provisions and limitation of liability and indemnification protections for directors and officers and employees of CNQ generally
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- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
- -Ontario SecmSties Commission in the Matter of Canadian Trading and Quotation Inc Page 3 of 13
2 FITNEss
In order to ensure that CNQ operates with integrity-and in the public interest each person or companythat owns or controls directly or indirectly more than 10 of CNQand each officer or director of CNQ is a fit and proper person and the past conduct of each person or company that owns or controls directly or
indirectly more than 10 of CNQ and each officer or director of CNQ affords reasonable grounds for belief that the business of CNQ will be conducted with integrity
3 FAIR AND APPROPRIATE FEES
(a) Any and all fees Imposed by CNQ will beequitably allocated Fees will not have the effect of creating bafflers to access and must be balanced with the criteria that CNQ will have sufficient revenues to satisfy its responsibilities
(b) CNQs process for setting fees will be fair appropriate- and tmnsparent
4 ACCESS
(a) CNQs requirements permit all properly registered dealers that are
members of a recognized SRO and satisfy access requirementsestablished byCNQ to access the facilities of CNQ
(b) Without limitingthe generality of the foregoing CNQ will
(i) establish written standards for granting access to CNQ Dealers
trading on CNQ
(i) not unreasonably prohibit or limitaccess by a person or
companyto services offered by iti and
(iii) keep recordsof
(A) each grant of access including for each CNQ Dealer the reasons for granting such access and
(B) each denial o limitation of accees including the
reasons for denying or limitingaccess to any applicant
5 FINANCIAL VIABlUTY
(a) CNQ willmaintain suffic nt financial resources for the proper performance of its functions
(b) CNQ will calculate and report thosefinancial ratiosdescribed below to
permit trend analysis andprovide anearly warning signal with respectto the financial health of the cOmpany
(c) CNQ will maintain (i) a liquidity measure greater thanor equal to-zero (ii) a
debt to cash flow ratio less than or equal to 401and (iii) a leverage ratio less
than or equal to401 For this purpose
(i) liquidity measure is
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-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-Ontario Securites Commission In the Matter of Canadian of 13-Trading and Quotation Inc Page 4
(working capital + borrowing capacitY) - 2 (adjusted +budgeted expenses adjusted capital expenditures-
- adjusted revenues)
where
Aworkingcapital is current assets
mnus current liabilities
B) borrowing capacity is the pdndpal amount of long term debt available to be
borrowed under loan orcredit
agreements that are In force
C) adjusted budgeted expenses are
95 of the -expenses (other than depreciation and other non-cash items) provided for in the budget for the current
fisca year
D) adjusted capital expenditures are
50 of average capital expenditures for the previous throe fiscal years except that in each of the first three years adjUsted capital expenditures shall be determined as follows
in the first after 28 year February 2003 (Year 1) 50 of l3rd of Start Up Capital Expenditures
in the second year after February 28 2003 (Year2) 50 of [113rd
(23rd Start-up Capital Expenditures plus Year 1 Capital Expenditures)] and
in the third year after February28 rd2003 (Year 3) 50[13rd(13
Start-up Capital Expenditures plus Year 1 Capital Expenditures plus Year 2 Capital Expenditures)]
whom Start-up capital Expenditures are
thet0tal Capital Expenditures pdor to
July 25 2003 and
E) adjusted revenues are 80 of
revenues plus 80 of investment income for the previous fiscal year except that in each of the first two years after recognition as a stock exchange adjusted revenues shall be bulllculated
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-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-Ontario Securities Commission In the Matter of Canadian Inc 13-Trading and Quotation Page 5 of
as 80 of revenues plus 80 of
investment income as forecasted on
April 7 2004
(ii) debt to cash flow ratio is the ratio of total debt (including any line of credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payables accrued and other EBITDAexpenses liabilities) to (or earnings before interest taxes depreciation and amortization) for the
previous month multiplied by 12 and
(iii) financial leverage ratio is the ratio of total assets to shareholders equity
in each case followingthe same accounting principles as those used for the audited financial statements Of CNQ except as provided in paragraphs h and i below
(d) On a quarterly basis (along with the quarterlyfinancial statements required to be filed pursuant to paragraph 10) CNQ Will report to the Commission the monthly calculation of the liquidity measure and debt to cash flow and financial leverage ratios the appropdatenees of the calculations and whether anyalternative calculaUons should be considered
(e) Except as provided in g below if CNQ fails to maintain any ofthe liquidity measure the debt to cash flow ratio or the financial ratio inleverage any month it shall immediately report to the commission or its staff
(f) Except as provided in g below if CNQ fails to maintain any of the liquidity measure the debt to cash flow ratio orthe financial leverage ratio for a period
of more than three months its President will immediately deliver a letter
advising the Commission or itsstaff of the reasons for the contlnuedratio deficiencies and the steps being taken to rectify the problem and CNQ will not without the prior approval of a Director of the Commission make any capital expenditures not already reflected in the financial statements or make any loans bonuses dividends or other distributions of assetsto any director Officer related company or Shareholder until the deficiencies have been eliminated for at least six months
(g) Recognizing that CNQ is a start-up operation expecting to incur losses the
following apply during the first two yearsof operations after recognition as a
stock exchange
(i) paragraphs e and above shall not apply if the debt to cash flow ratio is negative orgreater than 401 but CNQ will not without the permission of the Director make any loans bonuses cash dividends or other distributions of assets to any director officer related company or shareholder until thedeficiencies have been eliminated for six months except for bonuses payable to
employeesunder a profit sharing bonus plan included in the forecast finan(bullial statements provided to the Commission as pact of the application for recognition and
(ii) on a quarterly basis (along with the quarterly financial
statements required to be filed pursuant to paragraph 10) CNQ
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Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
mhtndfdeCK)oeurnents and Settingsshh8739bullocalSettingsTempocaryIntemet Fries 12bull22008
-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Ontario --Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 6 of 13
will provide the Commission with the following
A) a comparison of the revenuesend expenses incurred by CNQ with the andrevenues expenses forecasted on April 7 2004 for each of the months and
B) for each revenue item whose actual was lower than its forecasted amount by t5 or more and for each expense item whose actual was higher than its forecasted amount by 15 or the formore reasons
the variance and the steps that will be or have been taken to address any issues arising from the variance
(h) CNQ may recognize the subordinated convertible debentures described in the term sheet dated November 29 2002 (Subordinated Convertible Debentures) as equity for the purposes of calculating the financial ratios in paragraph c above provided that
(i) the amount of the Subordinated ConvertibleDebentures recognized as equity should not exceed $5000000
(ii) CNQ shall not repay the Subordinated Convertible Debentures or pay cash interest on the Subordinated Convertible Debentures if such paymentwill result in CNQ not meeting the financial ratios and
011)pdor to making a cash interestpayment or principal repayment CNQ should demonstrate to the satisfaction _ofthe Commission thai it will continue to meet the financial ratiosafter payment
(I) CNQ may recognize the debts owed by CNQ described in the subordinated agreement dated December 23 2002 between 1141216 O ntadoLimiteld WendSley Lake Corporbullon CNQ and The Businassbull Engineedng Science amp
Technology Discoveries Fund Inc (Junior Debt)as equity for the purposes of
calculating the financial ratios in cparagraph above provided that
(i) CNQ shall not repay the Junior Debt or paycash interest on the Junior Debt if such payment will result in CNQ not meetingthe financial ratios and
(ii) prior to making a cash interest paymentor principal repayment CNQ should demonstrate to the satisfaction of the Commission that it will continue to meetthe financial ratros after payment
6 REGULATION
(a) CNQ will maintain its abilityto perform its regulationfunctions including setting requirements governing the conduct of CNQ Dealers andCNQ Issuers
and disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retainedand will continue to retain Market Regulation Services
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no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
- -Ontario securities Commission In the Matter of Canadian Trading and (bullotation Inc Page 7 of 13
no (RS Inc) as a regulation services provider to provide as agent for CNQ certain regulation services which have been approved by theCommission CNQ will provide to the Comrnission on an annual basis a list outlining the
regulation services performed by RS Inc and the regulation services performed by CNQ All amendments to those listed services are subject tothe prior approval of the Commission
(c) CNQ will provide the CommissiOn with an annual report with such information regarding Its affairs as be from time to time Themay requested annual report will be in such form as may be specified by the Commission from time to time
(d) CNQ will perform all other regulation functions not performed by RS Inc
(e) Management of CNQ (including the President and CEO) will at least annually assess the performanca by RS Inc of its regulation functions and
report to the Board together with any recommendations for improvements CNQwiil provide the Commission with copies of such reports and Shalladvise the Commission of any proposed actions adsing therefrom
(f) CNQ shall provide the Commission with the information set out in AppendixA as amended from time to time
7 CAPACITY AND INTEGRITY OF SYSTEMS
For each of thatits systems support order entry order routing execution data feeds trade reporting and trade compadson capacity and integdty requirements CNQ will
(a) On a reasonably frequent basis and inany event at least annually
(i) make reasonable current and futurecapacityestimates
(ii) conduct capaciiy slress tests of critical systems to determine the ability of those systems to process transactions in an accurate timely and efficientmanner
(iii) develop and implement reasonable procedures to review and
keep current the development and testing methodology of those
Systems
(iv) review the vulnerability of those systems and data centre
computer operations to internal and external threats including physical hazards and natural disasters
(v)establish reasonable contingency-and business continuity plans
(b) annually cause to be performed an independent review and written report in accordance with established audit procedures and standards of its controls for ensuring that it is in compliance with paragraph (a) and conduct a review by senior management of the report containing the recommendations and conclusions of the independent review and
(c) promptly notify the Commission of matedal systems failures and changes
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-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
Intemet Files 1222008mhtmlfilcCK)ocuments and Settingsbullshh8739poundLocalSotfingsTemporary
-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 9 of 13-
(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
interact Files 1222008mhtmlbullfile]CbullDocuments and Settingsshh8739bullLocal SettingsTemporary
SecuritiesOntario Commission- In the Matter of Canadian Trading and Quotation Inc Page 10 ofl3
(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
mhtmlffleCbullDocuments and Settingskshh8739bullLocal SettingsTemlbullrary Intemet Files 222008
-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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L
Ontario -
Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-Ontario SecuritiesCommission In the Matter of Canadian Trading and Quotation Inc Page 8 of 13-
8 PURPOSE OF RULES
(a) CNQ will establish Rules that are necessary or appropriate to govern and
regulate all aspects of its business and affairs
(b) More specifically CNQ will ensure that
(i) the Rules are designed to
(A) ensure compliance with securnleslagislation
(B prevent fraudulent and manipulative acts and
practices
(C) promote just and equitable principles of trade
(D) foster cooperation and coordination with persons or companies engaged in regulating clearing settling processing information with respectto and
facilitating transactions in securities and
(E) provide for appropriate discipline
(ii) the Rules do not
(A) permit unreasonable discdminationamong CNQ Issuers and CNQ Dealers or
(13)impose any burden on competition that is not
necessary o appropriate in fUdlbulleranceof securities
legislation
(ill) the Rules are designed to ensure that its business is
conducted in a manner so as to afford protection to investors
9 RULES AND RULE-MAKING
CNQ will comply with the rule review process set out In Appendix B as amended from=time to time concerning Commission approval of changes in its Rules
10 FINANCIAL STATEMENTS
CNQ will file unaudited quarterly financial statements within 60 days of eaoh quarter end and audited
annual financial statements within 90 days of each yearend prepared in accordance with generally accepted accounting principles
11 DISCIPLINE RULES
(a) CNQ will ensure through Market Regulation Services Inc and otherwise that any person or company subject to its regulation is appropriately disciplined for violations of securities legislation and the Rules
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(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 9 of 13-
(b) CNQ will have general diseiplinaryand enforcement provisions in its Rules that will apply to any person or company subject to its regulation
12 DUE PROCESS
CNQ will thatensure
the of limitations or conditions on access and denial of access are fair and reasonable
(a) its requirements relating to access to facilities of CNQ the imposition
are(b) parties givenan opportunity to be heard or make representations and
(c) it keeps a record gives reasons and provides for appeals of its decisions
13 INFORMATION SHARING
CNQ will share information and othenNise co-operate with the Commission and its staff theCanadian Investor Protection Fund other Canadian exchanges and recognized self-regulatory organizations and regulatory authorities responsible for the supervision or regulation ofsecurities firmsand financial institutions
14 ISSUER REGULATION
(a) CNQ will ensure thatonly the issuers setout in Appendix C as amended from time totime are eligible for listing provided thatupon applicationby CNQ made at any time after May 152005 the Commission mayamend or revoke this condition if it determines that to do so would not be prejudicial to the publicinterest
(b) CNQ has sufficient authority over its issuers
(c) CNQ carries out appropriate review procedures to monitor and enforce issuer compliance with the Rules
(d) CNQ willamend its Policies and Forms from time to time at the ofrequest the Director Corporate Finance to reflect changes to the disclosure i requirements of Ontario securities law i
15 CLEARING AND SETTLEMENT
CNQ has appropriate arrangements in place for clearing and Settlement through a deadng agency recognized by the Commission for the pubull0oses of the Securities Act (Ontario)
16 TRANSPARENCY REQUIREMENTS
CNQ will comply with the pro-trade and post-trade transparency requirements set in Nationalout
Instrument 21-101 Marketplace Operation
17 ADDITIONAL INFORMATION
(a) CNQ has completed and submitted Form 21-i01F1 Including the exhibits) to the Commission
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(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
SecuritiesOntario Commission- In the Matter of Canadian Trading and Quotation Inc Page 10 ofl3
(b) CNQ will providethe Commission with any additiona information the Commission may require from time to time
Appendix A
Information tO be filed
1 Quarterly Reporting on Exemptions or Waivers Granted
On a quarterly basis CNQ will submit to the Commission a report summarizing all exemptions Orwaivers granted pursuant to the rules policies or other similar instruments (Rules)to any CNQ Dealer or CNQ Issuer during the period This summary should Include the followinginformation
(a) The name Of the CNQ Dealer or CNQ Issuer
of(b) The type exemption or waiver granted during the pedod
(c) Date of the exemption or waiver and
(d) A description of CNQ staffs reason for the decision to grant the exemption or waiver
2 Quarterly Reporting on Quotation Applications
On a quarterly basis CNQ will submit to the Commission a report containing the following information
(a) The nlJmber of listing applications filed
of(b) The number listing applications that were accepted
(c) The number of listingapplications that were rejected and the reasons for rejection by category
(d) The number of listing applications thatwere withdrawn or abandoned and if
known the masons why the application was withdrawn or abandoned by category
(e) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change
(f) The number of listing applications filed by CNQ Issuers as a result of a
Fundamental Change that were accepted
(g) The number of listing applibullUons filed by CNQ Issuers as a result of a
Fundamental Change that were that were rejected and bulle reasons for
rejection by category
(h) The number of listing applications filed by CNQIssuers as a result of a
Fundamental Change that were withdrawn or abandoned and if known the reasons why the application was withdrawn or abandoned by category
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-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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L
Ontario -
Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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-
OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc 1 i of 3 Page
in each of the foregoing cases the numbers shall be broken down and otherby industry category in any manner that a Director of the Commission requests
3 Notification of suspensions and disqualifications
If a CNQ Issuer has been suspended ordisqualified from qualification for listing CNQ will immediatelyissue a releasepress setUng out the masons for the suspension and file this inf0rrnati0n with the COmmission
Appendix B
Rule Review Process
1 CNQ will file with the Commission each new or amended rule policyand other similar instrument (Rules) adopted by its Board
2 More specifically CNQ will file the followinginformation
(a) the Rule
(b)-a notice of publication including
(i) a descdption of the Rule and its impact
(ii) a concise statement together with supporting ofanalysis the nature purpose and effectof the Rule
(iii) the possible effects of the Rule on marketplaceparticipants competition and the costs of compliance
(iv) a description of the rule-making process including a
description of the context in which the Rule was developed the
process followed the issues considered the consultation process undertaken the abullnative approaches consideredand the reasons forrejecting the alternatives
(v) where the Rule requires technological changes to be made byCNQ CNQDealers or CNQ Issuers CNQ will provide a
description of the implications -ofthe Rule and where possible an
implementation plan including a description of how the Rule will be Implemented and the timing of the implementation
(vi) a reference to other]udsdictionsincluding an indication as to whether another regulator in Canada the United States or another
Jurisdiction has a comparable rule or has made or is contemplating making a comparable rule and if applicable a comparison of the Rule to the rule of the other jurisdiction and
(vii)whether the Rule is classified aspublic interest or
housekeeping and
i
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L
Ontario -
Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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-
OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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OSC -Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 2 of 4
rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Ontario -
Securities Commission In the Matter of Canadian Trading and Quotation Ino Page 12 off3
(viii)where the Rule is classified as housekeeping the effective date ofthe Rule
3 For the purposes of the Rule Review Pmoess a Rule may be classified as
housekeeping if it does not affect the meaning intent or substance of an existing rule and involves only
(a) the correction of spelling punctuation ortypographical grammatical mistakes or inaccurate cross-referencing
(b) stylistic formatting including changes to headings or paragraph numbers
(c) amendments required to ensure consistency with an existing approved rule or
(d) changes in routing procedures and administrative practices of CNQ that suchprovided changes do not impose any significant burden or any barrier
to competition that is not appropriate
Any Rule falling outside of this definition would be cetegodzed as a public interest Rule Prior to proposing a Rule that is of a public interest nature as defined above the Board of Directors of CNQ shall have determined that the entry int0 force of such public Interest Rule would be in the best interests of thecepital markets in Ontado The matedal filed with the Commission in relation to public interest Rules shall be accompanied by a statement to that effect
4 Where a Rule has been classified as public interest the Commission will publish for a
30 day comment period in its bullstin or on its webslte the notice filed by CNQ and the Rule If amendments to the Rule are necessaryas a result of comments received the Commission shall have discretion to determine whether the Rule should be re-published for comment If the Rule is re-published the request forlcomment shall include CNQs summaryof comments and theretoresponses together withan explanation of the revisions to the Rule and the supporting rationale for the amendments
5 A public interest Rule will be effective as of the date of Commission or on aapprovaldate determined by CNQ whichever is later A housekeeping Rule shall be deemed to have been approved upon being filed with the Commission unless staff of the Commission communicate to CNQ within five business days of receipt of the Rule their disagreementwith CNQs classification of the Rule as housekeeping and the reasons for their
disagreement Where staff of the Commission disagree with CNQs classificationCNQ shall re-file the Rule as a public interest Rule Ahousekeeping Rule shall be effective onthe date indicated by CNQ in the filing
6 The Commission shall publish a Notice of Commission Approval of both public interest t bulla nd housekeeping i Rules in its bulletin or on its website All such notices
torelating pubhc
interest Rules shall also include CNQs summary of comments and responses thereto All such notices relating to housekeeping Rules shall be accompanied by the notice filed by CNQ and the Rule itself
7 If CNQ is of the view that there is an urgent need to implement a Rule CNQ may make a
Rule effective immediately upon approval by CNQs board of directors provided that CNQ
(a) provides the Commission with wrbullen notice of the urgent need to
implement the Rule prior to the submission of the Rule to CNQs board of
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Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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-
OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Ontario Securities Commission In the Matter of Canadian Trading and Quotation Inc Page 13 ell3
directors and
(b) inoludes in the notice referenced in 2(b)(ibull an analysis in support of the need forimmediate implementation of the Rule
8 If the Commission does not thatagree immediate implementation is necessary the Commission will advise CNQ that and the for itsis disagrees provide masons disagreementIf no notice is received by CNQ within 5 business days of the Commissian receiving CNQs notifcatonCNQ shall assume that the Commission agrees with its assessment
9A Rule that is implemented immediatelyshall be published reviewed and approved in accordance with the procedure set out abQvebull Where the Commission subsequentlydisapproves a Rule that was implemented immediately CNQ shall repeal the Rule and publish a notice informing its marketplace participants
10 The termsbull conditions and procedures set out in this section may be varied or waived bythe Commission A waiverorvadation may be speddic or general and may be made for a time or for all time
Appendix C
Eligible Issuers
1 Only an issuer that is a reporting issuer or the equivalentin a jurisdiction in Canada and that is not in default Of any requirements of securities legislation in any jurisdiction in Canada is foreligible listing
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OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
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SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-
OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page I of 4
September 9 2005
IN THE MATTER OF
THE SECURITIES ACT RSO 1990
CHAPTERS5 AS AMENDED (Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(Section 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 recognizing the Canadian Trading and Quotation System Inc (CNQ) as a stock exchange pursuant to section 21 of the Act (Recognition Order)
AND WHEREAS CNQ has applied for an orderpursuant to section t44of the Act to vary the financial viability terms and conditions of the Recognition Order and to correct typographical errors in the Recognition Order
AND WHEREAS the Commission has received certain representations from CNQ in connection with CNQYs application to vary the Recognition Order
AND UPON the Commission thebeing of opinion that it is not prejudicial to the public interest to vary the
Recognition Order
IT IS ORDERED pursuant to section i44 of the Act thatthe Recognition Order be varied as follows
1 Item 5 of Schedule A of the Recognition Order is repealed and replaced by the following
5 FINANCIAL VIABIUTY
(a) CNQ will maintain sufficient financial resources for the proper performance of its functions
(b) CNQ will deliver to Commission staff its annual financial
budget together with the underlying assumptions that has been
approved by its Board of Directors within 30 days after the
commencement Of each fiscal year Such financial budget should
include monthly projected revenues expenses and cash flows
(c) For the two-year pedod commencing on September 9 2005
(i) CNQ will deliver to Commission staff unaudited
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rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
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- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
OSC -Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 2 of 4
rnhtm1ftleCkDocuments
monthly financial statements prepared in accordance with Generally Accepted Accounting Principles and a
status update on any pending capital raising transaction(s) inck4dingthe amount terms and name
(s) of individualsentities that have committed to
providing bullnding and their commitment within 30
days of each month end
(ii) CNQ will deliver to Commission staff the following wbullin 60 of each enddays quarter
(A) a comparison of the monthly revenues and expensesJncurredby CNQ with the projected monthly revenues and included in the
expenses most recent annual financial budget delivered to Commission staff and
(B) for each revenue item whose actual
was significantly lower than its projected amount and for each expense item whose actual was significantlyhigher than its projected amount the reasons for the variance
0ii) CNQ will prior to making acash interest payment or pfictcipal repayment on the following debts demonstrate to the satisfaction of Commission staff that it will have sufficient financ ial resources to
continue its operations after the payment
(A) the subordinated convertible
debentures described in the term sheet
dated November 29 2002
(B) the debts owed by CNQ described in the subordinated datedagreement December 23 2002 between 1141216 Ontario Limited Wendsley Lake
Corporation CNQ and The Business Engineering Science amp Technology Discoveries Fund Inc and
(C) any amounts owed by CNQto any officers or directors orto any person or
company that owns or controls directly
or indirectly mere than 10 of CNQ except for reasonable compensation arising in the normal course of business and
(iv) CNQ will prior to making any loans bonuses dividends or other distributions of assets to any director officer related company or shareholder that are inexcess of the amount included in the most
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-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
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-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
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OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-OSC Orders amp Rulings 2005 In the Mattbull of Canadian Trading and Quotation System Page3 of 4
recent annual financial budget delivered to
Commission staff demonstrate to the Satisfaction of
Commission staff that it will have sufficient financial toresources continue its operations after the
paymentbull
(d) After September 9 2007
(i)CNQ will on a quarterly basis (along with the
quarterly financial statements required to be delivered topursuant paragraph 10) reportto Commission staff the followingfinancial ratiosto permit trend analysis and provide an early warning signal with respect to the financial health of the
company
CA)a current ratio being the ratio of
current assets to current liabilities
(B) a debt to cash flow ratio being the ratio oftotal debt of(including any line credit drawdowns term loans (current and long-term portions) and debentures but excluding accounts payable accrued andexpenses other liabilities) to EBITDA (or eamings beforeinterest taxes depreciation and amortization) for the most recent 12 months and
(C) a financialleverage ratio being the ratio of total assets to shareholders
equity
in each case following the same accounting principles as those Used for the audited financial statements of CNQ
(i) If CNQ falls to maintain or anticipates it will fail to-
mantain
(A) a current ratio ofgreater than or
eclual to 111
(B) a debt tO cash flow ratio of less than
or equal to 401 or
(C) a financial leverage ratio of less than
or equal to 401
it will Immediately report to Commission staffand
(iii)IfCNQ fails to maintain its current ratio debt to
cash flow ratio or financial leverage ratio at the levels
outlined in paragraph (d)(ii) above for a period of
mhtmlfdeCK)ocuments and Settingsshhg739Local SettingsTemporaryInternvt Files 1222008
-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
mhtmlfileCbullDocuments and Settingsshh8739bullJocal SettingsTemporary Intemet Files 1222008
OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
-OSC Orders amp Rulings 2005 In the Matter of Canadian Trading and Quotation System Page 4 of 4
mornthan three months its President will
immediately deliver a letter advising Commission
masonsstaff of the for the continued raUo deficiencies and thesteps being taken to rectify the
situation and the Commission or its staff may impose terms or conditions On CNQ as it determines
appropriate including but not limited to requirements ouUined in paragraph (c) above
2 The word QuotatiOn in the heading of Item 2 of Appendix A of Sohedule A ofthe Recognition Order is replaced with the word Listing
3 The word routing in paragraph 3(d) of Appendix B of Schedule A of the RecognitionOrder is replaced with routine
Paul MMoore
Robert L Shirriff
mhtmlfileCbullDocuments and Settingsshh8739bullJocal SettingsTemporary Intemet Files 1222008
OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
OSC Policy andRegulation- Orders-Canadian Trading and Quotation System Inc - s I Page 1 of 2
IN THE MATTER OF
THE SECURITIES ACT
RSO 1990 CHAPTER5
AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND
QUOTATION SYSTEM INC
ORDER
(Section 144)
WHEREAS Canadian Trading and Quotation System inc (CNQ)has madean application (theApplication) to the Ontario Securities Commission (the Commission) for anorder pursuant-to section 144 of the Act amending the Commission order dated May 7 2004 recognizing CNQ asa stock
as variedexohange by an order dated Septemberg 2005 (the Recognition Order)i in conneofion with a proposed alternative market (the Alternative Market)
AND WHEREAS the Commission has receiVed certain representationsand undertakings from CNQ in connection with the Application
AND WHEREAS the Commission is satisfied that the order wouldgranting not be prejudicial to the public interest
IT 18 ORDERED pursuant to section 144 of the Act that the Recognition Order is varied as follows
1 sections 14(b)(c) and(d) of Schedule A of the RecognitionOrder are renumbered sections 14 (c) (d) and (e) respectively
2 new section 14(b) is added to Schedule A of the Recognition Order as follows
(b) CNQ may trade securities of Issuers listed on designated Canadian stock
exchanges in its Alternative Market without approving Such securities for listing provided that CNQ shall ceaseto trade any such security immediately upon notification that the security has been suspended or delisted by the designated exchange or ifit was the subject of a trading halt
3 new section 14(o) of Sohedule A of the Recognition Orderis amendedby adding the word
listed before the word issuers and
4 new section 14(d) of Schedule A oftheRecognition Orderis amended by adding the
word listed before the word issuer
mhtmlfileCkDocuments and Settingsbullshh8739bullLocalSottingsbullTemporaryInterest Files 1222008
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
- -OSC PolicyandRegulation Orders Canadian Trading and Quotation System Inc s 1 Page 2 of 2-
provided that
a for at least two months immediately prior to operating the Altemative Market CNQ shall make available to the public any technology requirements regarding interfacing with and access to the marketplace and
b after the technology requirements set out in subsection (a) have been published CNQ shall make available to the public for at least one month testing facilities for interfacing with and access to the marketplace
DATED June 13 2006
Suresh Thakmr
Harold P Hands
mhlmlfileCDocumcnts and Setiingsbullshhg39bullbullcal SettingsbullTemporaryIntembull Files 1222008
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
SRO NOtices and Discipllnabull Proceedings
IN THE MATTEROF THE SECURITIES ACT R8O 1990
CHAPTER S5 AS AMENDED (the Act)
AND
IN THE MATTER OF
CANADIAN TRADING AND QUOTATION SYSTEM INC
ORDER
(SeJtton 144 of the Act)
WHEREAS the Commission issued an order dated May 7 2004 as varied on September 9 2005 and June 13 2006grantingthe recognition of the Canadian Trading and Quotation System Inc (CNQ) as e stock exchange pursuant to section 21 of the
(the Recognition Order)
AND WHEREAS the terms and conditions attached as Schedule A to the Recognition Order reference Market RegulationServices Inc (RS Inc) in Item 6
AND WHEREAS effective June 12008 RS Inc wi combine its operations bullth the Investment Dealers Assoclation of Canada to form the Investment Industry Regulatory Organlzationof Canada (IIROC)
AND WHEREAS the Commission is of the that it is notopinion prejudicial tothe public interest to vary the Recognition Order to refer to IIROC
IT IS ORDERED pursuant to section 144 of the Act that the RecognitionOrder be reded as foll0Wcent
4 Item 6 of Schedule A of the Recognition Order is and by therepealed replaced following
6 REGULATION
(a) CNQ will maintain its ablBtyto perform its regulation functions including setting requirements governing the conduct of CNQDealars and CNQ Issuersand disciplining CNQ Dealers and CNQ Issuers
(b) CNQ has retained and will cbullntlnue to retain the Investment IndusW Regulato W Obulllanization Of Canada (IIROC) as a [egulaSonservices provider to provide certain regulationsebulloes which have been approved bythe C0mmibullionCNQ will provide to the Commission On an annual basis a liSt outlining the regulation services perrormsd by IIROC and the regulation services performed by CIbullIQ All amendments to those listed services are subjebull to the of theprior aptoval Commission
(c) CNQwIII provide the Commission with an annual report with such information regarding its affairs as may be
requested from time to time The annua report wi I be in such form as may bespedfiad iby the Commission from timeto lime
(d) CNQ will perform ell other regUlaton functions not performed by IIROC
(e) Management or CNQ (including the President and CEO) will at least assess the performanceannually by IIROC of its reguistion functions and report to the Board fogetber with any recommendations for
improvementsbull CNQ will provide the Commission with copiss of such reports and shall advise the Commission of aw IXOpOsed actions adsing therefrom
(f) CNQ Shall providethe Commission with the information set ouHn Appendix A as amended from time to t me
2 Item 11 of the Recognition Order is repealedand replaced by the following
11 DISClPLbull
(a) CNQ Will ensure through IIROC and otherwise theany person o r company subject to Its regulation is
appropriately disciplined for violations of securities isgislabullon and the Rules
(b) CNQ will have genera disciplinary and enforcement provisions in its Rulas that willapply to any person or
company subject to its regulation
ii i ii
2OO8 (2OO8) 31 OSCB 5685May 30
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
$RO N0Uces and DlsoiplinaryProceedings
Datsd this 16th day of May 2008 elfective on June 1 2008
bullN David Wilson
bullJemes EA Turned
I i i iiill i i llll i
May 30 2008 (2008)31 O6CB 5686
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
EXHIBIT C
FORM 5 FORM 7 AND FORM 10-
FORM 5
QUARTERLYLISTING STATEMENT
Name of CNSX Issuer (the Issuer)
Trading Symbol
This Quarterly Listing Statemeht must be posted on or before the day on which the IsSuers unaudited interim financial statements are to be filed under the Securities Act
ifor no interim statements are required to be filed for the quarter within 60 days of the end of the Issuers first second and third fiscal quarters This statement is not intended to replace the Issuers obligationto separately report material information forthwith upon the information becoming known to management or to post the forms required by the CNSX Policies If material inforrnation became known and was reported during the preceding quarter to which this statement relates management is encouraged to also make reference in this statement to the matedal information the news release date and the posting date on the CNSXca website
General Instructions
(a) Prepare this Quarterly Listing Statement using the format set out below The
sequence of questions must not be altered nor should qUestions be omitted or
left unanswered The answers to the following items must be in narrative form When the answer to any item is negative or notapplicable to the issuer state it in a sentence The title to each item must the answerprecede
(b) The term Issuer includes the CNSX Issuer and any of its subsidiaries
-(c) Terms used and not defined in this form are defined or interpreted in Policy 1
Interpretation and General Provisions
There are three schedules which must be attached to this report as follows
SCHEDULE A FINANCIAL STATEMENTS
Financial statements are required as follows
For the first second and thirdfinancial quarters interim financial statements prepared in
accordance with the requirements under Ontario securities law must be attached+
bullbullbull bull-bullbull--
j = -FORM 8 QUARTERLY LISTING STATEMENT
Nobulllber 14 2008
Pag8 1 --bullbullbullttbull
+ I i
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
If the Issuer is exempt from filing certain interim financial statements give the date of the exempting order
SCHEDULE B SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A
lm Related party transactions
Provide disclosure of all transactions with a Related Person thoseincluding previously disclosed on Form 0 Include in the disclosure the followinginformation about the with Relatedtransactions Persons
(a) A description of the relationship between the transacting parties Be as
as inprecise possible this descdption of the relationship Terms such as
affiliate associate or related company without further clarifying details are
not sufficient =(b) A description of the transaction(s) including those for which no amount
has been recorded
(c) The recorded amount of the tranSactionsdassifled by-financial statement category
(d) The amounts due to or from Related Persons the termsand and conditions relatng thereto
(e) Contractual obligations with Related Persons separate from other contractual obligations
(f) Contingencies involving Related Persons separate from other contingencies
w Summary of securities issued and options granted during the period
Provide the followinginformation for the pedod beginning on the date of the last Listing Statement(Forrbull 2A)
(a) summary of securities issued during the pedod
FORM 5- QUARTERLY LISTING STATEMENT November 14 2008
Page 2
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
Type of
Type of Issue DeScribe Secudty (private relationship (common placement of Person
shares public IssuerType of wifh
convertible offering Consideration (indicate if
Date of debentures exercise of Total (cash Related Commission Issue etc) warrantebull Numbar Prlca Proceeds Paidproperty etc) Pemon)
etc)
(b) summary of options granted during the periodbull
Name of Optionee Genedc description Market Date Number if Related Person of other OPtlonees Exercise Prce Expiry Date Price on
and relationship date of
Grant
1=1 ii
3= Summary of seoudUesas at the end of the reporting period
Provide the following informationin tabular format as at the end of the reporting pericbulll
(a) description of authorized share capital including number of shares for each class dividend rates on preferred shares and whether or not
cumulative redemption and conversion provisions
(b) number and recorded value for shares issued and outstanding
(c) description of options warrants and convebullble securities outstanding including number or amount exercise or conversion pdce and expiry date andany recorded
(d) number of shares
agreements or any
value and
in each Class of shams subject to escentbullrow or pooling other restriction on transfer
-FORM 8 QUARTERLY LISTING STATEMENT N0varnlbullr 4 2008
Page 3
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
1 List the names of the directors and officers with an indication of the position(s) held as at the date this report is signed and filed
SCHEDULE C MANAGEMENT ANALYSISDISCUSSION AND
Provide Interim MDampA if required by applicable securities legislation
Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to signthis Quarterly Listing Statement
o As of the date hereof there is na material informationconcemingthe Issuer which has not been publicly disclosed
3 The undersigned hereby certifies to CNSX that the Issuer is in compliancewith the requirementS of applicable securities legislation (as such term is defined in National Instrument 14-10i) and all CNSX Requirements (asdefined in CNSX Policy )
it All of the information in this Form 5 Quarterly Listing Statement is=true
Dated
Name of Director or Senior Officer
Signature
Official Capacity
FORM 6- QUARTERLY usriNG STATEMEICr November 14 2008
Page 4 bullexbull
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
I
Issuer Details For Quarter Date ofReP0rt Name of Issuer Ended YYMMD
Issuer Address
CltyPrevincelPostal Issuer Fax No Issuer NoCode Telephone ( ) ( )
Contact Name I
Contact Position Contact NoTelePhone
Contact Email Address web Site Addrbull=
-FORM 6 QUARTERLY USTING STATEMENT November 1lt 2008
PaQe 5
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX IssUer (the =Issuer)
Trading Symbol
Number of Outstanding Listed Securities
Date
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month This report is not intended to replace the Issuers obligation to separately report material information forthwith upon the information becomingknown to management or to post the forms required by the CNSX Policies If material information became known and was reported during the preceding month to which this report relates this report should refer to the material information the news release date and the posting date on the CNSXca website
This report is intended to keep investors and the market informed of the Issuers ongoing business and management activitiesthat occurred during the preceding month Do not discuss goals or future plans unless they have crystallized to the point that they are bullnaterial information as defined in the CNSX Policies The discussion in this report must be factual balanced and norbullpromotional
General Instructions
Preparethis MonthlyProgress Report using the format set out below The sequence of questions must not be altered nor should questions be omitted or
left unanswered The answers to the itemsmust bein narrative form State when the answer to any item is negative or not applicable to the Issuer The title to-each item must precede the answer
(b) The term Issuer includes the issuer and any of its subsidiaries
(c) Terms used and not defined in this form are defined or 1 -interpreted in Policy Interpretation and General Provisions
Report on Business
1 Provide a general overview and discussion of the development of the Issuers business and operations over the previous month Where the Issuer was
inactive disclose this fact
2 Provide a general overview and discussion of the activities of management
3 Describe and provide details of any new products or services developed or
offered For resource companies provide details of new drilling exploration or
FORM 7- MONTHLY PROGRESS REPORT November 14 2O08
Page 1
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
production programs and acquisitions of any new properties and attach anymineral oilor and gas or other reports required under Ontario securities law
4 Describe and provide details of any products or services that were discontinued For resource companies provide details of any drilling exPloration or production programs that have been amended or abandoned
5 Describe any new business relationships entered into between the Issuer the Issuers affiliates or third contracts toparties including supply products or
services joint venture agreements and licensing agreements etcState whether the relationship is with a Related Person of the Issuer and provide details of the relationship
6 Describe the expiry or termination of any contracts or agreements between the Issuer the Issuers affiliates or third parties or cancellation of any financing arrangements that have been previously announced
7 Describe any acquisitions by the Issuer or dispositions of the Issuers assets that occurred month Provideduring the preceding details of the nature of the assets acCluired or disposed of and provide details of the consideration paid or payabletogether with a schedule of payments if applicable and of any valuation State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and details of theprovide relationship
8 Describe the acquisition of new customers or loss of customers
9 Describe any new developments or effects on intangible products such as brand circulationnames listsbull copyrights franchises licenses patents software
subscription lists and trade-marks
0 Report on any employee hirings terminations or layoffs with details of anticipated length of layoffs
11 Report on any labour disputes and resolutions of nose disputes if applicable 12 Describe and provide details of legal proceedings to which the IsSuer became a
party including the name of the court or agencY the date instituted the principal parties tO the proceedings the nature of the Claim the amount claimed if any if the proceedings are being contested and the present status of the proceedings
-13 Provide details ofany indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness
14 Provide details of any securities issued and options or warrants granted
(1)Security Number Issued Details ofIssuance use of Proceeds
(1) State aggregate proceeds and intended aiocation Of proceeds
-FORM 7 MONTHLY PROGRESS REPORT November 14 2008
Page 2
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
15 Provide details of any loans to or by Related Persons
16 Provide details of any changes in directors officers or committee members
17 Discuss
Issuers any trends which am likely to impact market(s) or politicalregulatorytrends
the Issuer including trends in the
FORM 7- MONTHLY PROGRESS REPORT November 14 2008
Page 3
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
i
Certificate Of Compliance
The undersigned herebycertifies that
The undersigned is a director andor senior officer of the Issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Cebullficate of Compliance
As of the date hereof there were is no matedal information concerning the Issuer which has not been publicly disclosed
The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in Nationa Instrument all CNSX defined in CNSX14-101)and Requirements (as Policy 1)
4 AI of the information in this Form is true7 Monthly Progress Report
Dated
Name of Director or Senior Officer
Signature
Official Capacity
Issuer Details For Month Date of Report
Name of Issuer End YYMMID
Issuer Address
CitbullProvincePostal Code Issuer Fax No Issuer Telephone No
( ) ( )
I I I I
Contact Name Contact contact Telephone No
PosiUon
I I
Contact Email Address Web site Address
I I
-
bull_ bullCbullLbull
-FORM 7 MONTHbY PROGRESS REPORT Nobullmbull 14 200e
Page 4
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
FORM 10
NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)
1
Name of CNSX Issuer (the Issuer)
Trading Symbol
Issued and Outstanding Securities of the Issuer Prior to Transaction
Date of News Release Fully Disclosingthe Transaction
1 Transaction
Provide details of the transaction including the date description and location of assets if applicable parties to and type of agreement (eg sale option license contract for Investor Relations Activities andetc) relationship to the Issuer The disclosure should be sufficientlycompleteto enable a reader to
theappreciate significanceof the transaction without reference to any other material
ProVide the following information in relation to the total consideration for the transaction (including details of allcash non-convertible debt securities or other consideration) and any required work commitments
(a) Total aggregate consideration in Canadian dollars
(b) Cash
(c) Other
bull) Work commitments
State how the purchase or sale pdce and the terms of anyagreement were determined (eg arms-length negotiation independent committee of the Board third party valuation etc)
J If the transaction involved the issuance of Securifiesbullother them debt securities that are not convertible into
listed Secuflticentbull gse Form 9
FORM 10- NOTICE OF PROPOSED bull bull bull=bullibull SIGNIFICANT TRANSACTION
November 14 2008-
Page 1
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
__
Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer
If the transaction is an acquisition details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired
6 Provide the following information for any agents fee commission bonus or
finders fee or Other compensation paid orto be paid in connection with the transaction (including warrants options etc)
(a) Details of any dealer agent broker or other receivingperson compensation in connection with the transaction (name address If a corporation identifypersons owning or exercising voting control over 20 or more of the voting shares if known to the Issuer)
(b) Cash
(c) Other
State whether the vendor sales agent broker or other person receiving compensation in connection with the transaction-is a Related Person or has
any other relationship with the Issuer and provide details of the relationship _
If applicable indicate whether the transaction is theacquisitionof an interest in property contiguous to or otherwise related to any Other asset acquired in
the last 12 months
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION November 1-4 2008
Page 2
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
2 Development
Provide details of the development The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material
3 Certificate Of Compliance
The undersigned hereby certifies that
The undersigned is a director andor senior officer of the issuer and has been
duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance
1 To the knowledge of the Issuer at the time an agreement in principle was
noreached party to the transaction had knowledge of any undisclosed material information relating to the Issuer other than in relation to the transaction
As of the date hereof there is no material information theconcerning Issuer which has not been publicly disclosed
The undersigned hereby cerbullfies to CNSX that the Issuer is in compliancewith the requirements of applicable securities legislation(as such term is defined in National Instrument 14-101) and all CNSX Requirements (as defined in CNSX Policy 1)
All of the information in this Fobullm 10 Notice of Proposed Significant Transaction is true
Dated
Name of Director or Senior
Officer i
Signature
Official-Capacity
-FORM 10 NOTICE OF PROPOSED
SIGNIFICANT TRANSACTION NOtbullmtber 14 2008
Page 3
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
EXHIBIT D
CNSX Trading Activity
65 l
deg mmVolume BValue --Trades
4500- A55
i bulli i
i 2mebull 3o
-20 i 1500
15
10 p bullIIIIIIM ll+ilLlli=
i 5oo
+ 5+
o Lo + bull+++ + bull+++++ + + + + +bull ++ ++++++++++bullmE+++++E++++P++++ + +
++ bull
+
CNSX Listed Issues i o i+oi +
+ 120
i BUsted lllDested --Totallssues --TotallJstirbull bull+ 110
8 bullI i
J+ 1oo
+ J+op
70+ i60 bull
2i i bull
20
10
deg o + -o gt gt bull- gt gt o o o gt -=gt g bullgt g -bull bull o-+gt bullgt- +gt =gt
+++++++++++0+++++++++bull++bull++++++++++++
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09
EbullD
Jan-09
Feb-09
Mar-09
Apr-09 May-09 Jun-09 Jul-09
Aug-09 Sep-09
)ct-09
Nov-09 Dec-09
267000180 204232857
162737182 167722629 124014330 168748972
100629280
51635915
115970809 171504257
142864206 134162369
22687111
50180950
32826544
59085232
39225238
31778055
14379051
13066043 7783370
30511279
20718908
39483060
289687291
254413807
195563726
226807861
163239568 200527027
115008331
64701958
123754179
202015536
163583114
173645429
783
1972
1679
2605
2403
1585
1250
2019
629
1510
1267
2274
- 1218
-2313
1598
-2803
2284
-4265
-4374
9127
6324
- 1902bull
615degA
270
Pure
(Net of
Trading Crosses
- Monthly Shares
Debts Warrants
Traded
amp Rights)
240
210
t80
== i deg15o
i Et20
90 cedil
6O
3O
Jan-09 Mar-09 May-09 Juk09 Sep-09 Nov-09
3oo
Pure
(Including Trading - Monthly
Crosses Debts
Shares
Warrants
Traded
amp Rights)
27o
240
210
180
o 150
S 120
9O
6O
3O
0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09